87 Slammys

Short answer, yes, they were trying to have a laugh.

"Kayfabe" is a very old term from the carnival days, like early 1800s or so, which is basically pig latin for "fake" and was used as a kind of code word among early workers that someone not hip to the business was around and they needed to keep things quiet. So like a couple of wrestlers would be working out the details on a match and a mark (fan) would be nearby and they'd say something like "Let's go see our friend Kayfabe" or just "Kayfabe" by itself to indicate silence was needed until they left.

Later, into the TV era, the word "kayfabe" just came to mean maintaining character in general. Now it basically means nothing since the fourth wall has been shattered anyway.