I can't tell what's happening. What just happened? Which scenario did I just watch?

A) .Lay doesn't actually understand the sentence at all, but he totally THINKS he does, and he answers "twice." to the question he THOUGHT she asked (which is who knows what?). He is proud of himself afterwards that he knew English, by show of that happy smile.
Then he coughs, because, well, Kpop idols cough too.

B). Lay totally understands the question and that wasn't a cough, it was a moan.

C.) Lay knows he could only understand "how many times," so he just says "twice" to be funny, but he doesn't actually think that's the correct answer or anything. Then he snickered afterwards, because he knows he's being ridiculous.

Thanks Yixing, you have officially murdered me twice

He said Twice... umh!!!