Isa assumed the laughing was entirely about the ugly chocobo being for Cloud. Why would he possibly laugh at him saying Lea was that good at the ring toss?

"Oh. I see him while I'm working at the bar a lot. Are they together, or just that close of friends?" That's the only two reasons he can think of that she'd get the other Cloud something so hideous on purpose. Or that he'd be at the bar as often as he is. Romantic partners, or really close friends like he and Lea are.