Why is it that middle schoolers and some high schoolers laugh at masterbating?

Latency age: Likely culprits at that age: developmentally leaving latency phase (i.e., from denial of sexuality & sexual partner attractions as part of life in favor of rule-based social interactions), differences in pubertal timing, increases in self-consciousness, culturally determined taboo nature of acknowledging sexuality, and being triggered (energized) by sex related thoughts and feelings.

Laughing at sex: Most children in the us are raised not to talk about sex or ever demonstrate anything sexually. It is a forbidden subject, and when someone mentions it, it tends to cause tension. Common responses to this tension are embarrasment, anger, and laughing, which are all coping mechanisms. For teens and tweeners to show masturbation is breaking a common social rule; this leads to discomfort in witnesses.