Damien doesn't seem to find anything particularly funny about it. His hackles aren't up the same way that Pru's are, but he is definitely exasperated - he's facepalming as Yugo tries to explain himself, as if contemplating what a sinking ship this is.

Pru will irritably tell him that it isn't her job to enforce Angelic laws - but that doesn't mean she doesn't know sleezebag behaviour when she sees it. She doesn't know much about the rewriting aspect of the Severing considering she lives on that earth normally, but Yugo sure didn't seem ashamed of himself until she pointed it out.