When Kramer from Seinfeld apologized on David Letterman for his racist outburst in 2006, the audience laughed

Michael Richards, the man who played Kramer on Seinfeld, is a character. He's hilarious and outrageous. In 2006, he was a little too outrageous when he went off on a racist rant during a stand-up routine.

Richards received a lot of criticism for his angry, offensive remarks. He went on David Letterman to apologize for the rant and was introduced by cast mate Jerry Seinfeld.

When Richards first apologized to Letterman, the audience, apparently confused, laughed. They thought it was some sort of joke.

(Source)