Just as Mario & Luigi are cornered by Princess Shroob and several Shroob soldiers after the former removes her Peach disguise on the mothership, one of the Shroobs suddenly begins taking pictures before blasting the rest and their princess away with its blaster before revealing itself to be Kylie Koopa in disguise.
When Bowser attempts to kidnap the fake adult Peach, young Toadsworth comes charging at him riding atop baby Peach's carriage without hesitation, demanding he return the adult Peach at once. Also counts as a moment of funny due to the fact that baby Peach is in the carriage and is looking like she's having a blast.
The Mario Bros destroying the Shroob mothership.
There's something eerily awesome about entering the Koopaseum to find an army of Shroobs reveling in their tyranny. If you didn't already realize how much power and control the Shroobs had on the situation, that was the moment it clicked.