They were laughing about the watersports double entendre. Believe me Sheinelle knows what water sports means. They were only secondarily laughing at Lotche.
I'm going to guess they know where he's hiding, are just waiting for him to give up and the stay indoors order was to get any explosives found in the Boston area under control.
Jesus Christ Dan, I just saw the photo shoot of Terry in the swimsuits and I can understand you not needing to actually play outside the relationship. Hubba hubba!