Translation:Why do you keep laughing?
Putting 在 before the verb has the effect of creating the equivalent of the English present continuous tense, i.e. indicating that the action is in progress or ongoing.
You can't. Mandarin is a very open-ended language and much less precise than English. Another example would be 房子。It's extremely common yet we English speakers wonder, do they mean apartment, condo, semi-detached, or fully-detached house? There are many other examples. We just need to try to understand the context in which it is used and use good judgment. In this case if someone was laughing and this phrase was used we would know they were referring to that, whereas if someone was constantly smiling we would know they mean that.