Also during the confrontation with Aigis, Shadow Labrys disguised as General Teddie is goading them to follow the rules… then Elizabeth just tosses her grimoire into the TV, ruining it. Problem solved.
Well, almost solved. The speaker still works, as is shown after the fight with Aigis. Of course, Elizabeth just snaps her fingers and blows the speaker up. And then acts innocent about it.
Elizabeth: Oh, my! Flames have suddenly burst from the speakers! How dreadful...
During Yosuke's story mode, he discovers everyone's acting weird because it's an illusion to get them to fight each other. Yukiko said that Yosuke kept demanding her to wash his back, which leads to this:
Yosuke: Wha-well, never mind that. Yukiko, have you seen a girl around?
Yukiko: No, I'm sorry, but I haven't...did you want her to wash your back?
In Yu's story mode, Teddie asks him to bring back a nurse porno because Yosuke's mom destroyed his stash. And whenever Yu brings it up, Yosuke flips out.
Yosuke: WHAT'S WRONG WITH NURSES?!
Also, this line when Teddie brings up the nurses in front of the whole Investigation Team in Yosuke's story mode.
Yosuke: (When did this conversation go from working to wanking in just two steps?!)
Aigis in her Story Mode after defeating Naoto… during their conversation, Aigis thinks of Naoto as a she (Mitsuru and Akihiko both still think Naoto is male), and Naoto comments on Aigis not hiding her true appearance, leading to the following exchange:
Aigis: I am curious, though. When you refer to your "true appearance," do you mean the fact that you are a woman?
Naoto: [surprise] Wh… what?
Aigis: Am I mistaken?
Naoto: [evasive] Oh, um, well…
Aigis: Your clothing hides it, but my sensor scan shows the body measurements of a human with female proportions.
Naoto: [shocked, blushing] Wh-what do you mean!? How much can you see!?
General Teddie: [interrupts on monitor] Hey, hey, enough with the chitchat! Hurry up and move on to the next—
Aigis: [ignores him] Would you like to know your current measurements? From top to bottom, they are…
Naoto: [interrupts, blushing again] Th-that's quite all right!
General Teddie's eyes widen and he pants pervertedly.
General Teddie: Never mind little old me! Please, finish that line of thought. I demand it!
Naoto: How did we get so off subject!? If you're going to go, please hurry and leave!
The whole exchange between Yu and Yosuke in the latter's story mode and later, in the manga due to the effects of the illusion Yu seems pretty… protective of Nanako.
Yu: How dare you, calling her "Nanako-chan" in that intimate way!?
Yosuke: Yes, sir! I'm sorry, sir! Umm, forgetting Nanako… san… for the moment, it seems like there's someone here besides us. She can't use a Persona, so I thought maybe she was dropped in here… Uh, Yu?
Yu: Why would you forget Nanako!?
Yosuke: That's ridiculous! I mean, c'mon, Nanako-cha… san really likes you no matter what! She's always telling me how you're such a nice big brother and how you're so cool!
Yu: Yosuke... enough. You "always" talk to Nanako? Why? Where? What do you mean by "always"? What was the precise date and time when you spoke to her!?
Yosuke: Oh crap, I was lying, I'm sorry!
Yu: What…? You were lying!? Are you saying Nanako doesn't like me!? That she doesn't think I'm nice or cool at all!?
And later on in the conversation, this:
Yosuke: (To himself) Ahem… sorry, Nanako-chan. (To Yu.) Haa haa! That Nanako-chan! What a dummy, right!?
Not to mention Yosuke outright admits he mistook it for something more…intimate at first.
All this after saying this when they first meet:
Chie: Oh, it's Yosuke… what a letdown.
Early on Yosuke comments about having Teddie keep the TVs up in the TV world in case someone gets trapped there and Chie mentions that no one would be careless enough to fall into the TV. Kanji falls into his family's new TV after falling asleep. Not to mention half of Kanji's story which includes his joke path that he's still thinks he's in dreamland seeing his wish came true all the sudden without realizing.
In her story mode, Naoto meets up with Akihiko, who proceeds to lecture her on taking care of her body while flexing.
Akihiko badgers a bartender for protein. The bartender thinks protein is a code word and Akihiko is going through some sort of withdrawal.
The only moment when a true man can cry according to Akihiko.
Akihiko: A true man is only allowed to cry when he loses his wallet!
Chie: Y-Yes, Master!
In the beginning of Aigis' story, as Mitsuru tells her to investigate the hijacked plane for "sensitive" cargo
Aigis: Mitsuru-san's cargo… sensitive belongings for a vacation… Ahh, I understand. Hijacking a plane out of a desperate desire for undergarments… this incident will surely go down in history.
Mitsuru's eyes bulge at the unexpected comment.
Mitsuru: Wha-!? You're jumping to conclusions! It's not "sensitive" in that way!
In Yu's story, after the battle vs Aigis, ELIZABETH just bursts right the hell out of nowhere and asks for Yu to fight. Yu's total confusion at the fact that she even wants to since there's no point in it, and Elizabeth's constant mispronouncing of words end up probably making it one of the best parts in Yu's story.
Elizabeth: This encounter has borne much flute.
Elizabeth: Flue? Chimneys? Something to that effect.
To say nothing of Yu's inner-monologue noting his relief that he didn't meet Elizabeth instead of Margaret when he was a regular guest of the Velvet Room.
During Yosuke's story, after beating Yu, Yosuke remembers that Kanji's nickname was Beefcake Emperor and starts to panic rather spectacularly about the condition of his hind quarters. When he finds out that Kanji was already beaten by Teddie, Yosuke expresses his relief about how his "ass is safe".
Aigis' narration of what happened after the Investigation Team and Shadow Operatives returned to the real world through the Junes television.
That was practically the biggest goldmine of laughs after all is said and done. When they finally got out of the TV world, practically all the customers took pictures of the group appearing out of nowhere, especially since they consist of a woman in a spy catsuit with a fur coat, a half-naked guy wearing a cape, a pop star idol, a famous boy(actually a girl) detective, two robot girls (one of which is carrying an axe the size of a desk), the local store mascot, and the rest of the investigation team.
And of course, cops show up, and everyone proceeds to run like hell out of there. Labrys, being a Fish out of Water, has no idea what's going on, and Teddie, being rather stupid, also hasn't a clue. Rise is more concerned with her phone, Kanji tries to pick a fight every once in a while and Naoto repeatedly stops him. This is all conveyed in text but nevertheless, it's hilarious.
Labrys' annoyed grunt and flailing legs when she winds up stuck half-way through the exit TV because the axe/thruster combination that attaches to her back is too large.
Aside from the general hilarity of watching Kanji smash through the tournament all while thinking it's a dream, there's also the fact that a lot of plot-critical elements (such as the involvement of the Mysterious Entity in the tournament's events) simply fly right over his head without him noticing them.
In Yosuke's story mode, Yosuke makes a heartfelt speech about his friends to Aigis... and then butchers the last word by mistake. Which Aigis repeats.
At Yukiko's joke ending, when she comes across Yu, there's no illusion confusing their words for either of them, but Yu attacks Yukiko after she offers her boxed lunch, thinking that the real Yukiko would never endanger her friends like that.
In Naoto's story mode, after she and Mitsuru fight, they discuss the fact that illusions were warping each of their perceptions of what the other was saying:
Mitsuru: In that case, I'll… well, I'm willing to forget all the things you said about my body.
Naoto's narration: Wait, what? Her BODY!?
The final boss in Teddie's story mode. It's just Kanji, who thinks the tournament is still going and wants a fight. And Teddie goes along with it so he might be able to get Labrys to kiss him.
Yosuke's inner-monologue describing Chie, Naoto & Rise as the "We're-Actually-Sensible Team" during the ending of his story mode.
When Chie sees real Teddie for the first time in her story mode, he makes a funny noise.
One of Chie's victory poses sees her entering a crane stance and Tomoe materializing in front of her, blocking her from the audience's view. Chie then proceeds to leap around her Persona and pose for the camera again.