We say "That's funny, that's not funny" when what we really mean is "I find that funny, I don't find that funny".

Rather similar to the way we say "You are annoying me" when what we mean is "I am getting annoyed with you.".

Or to stretch it a little further: "Men at some time are masters of their fates: The fault, dear Brutus, is not in our stars, But in ourselves.
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Try that smiling and hugging in London and you probably wouldn't be arrested, because there wouldn't be any police around to do it. But you'd probably get thumped, if you were a bloke anyway.