They own their name because their mouth always is in a smiley position.

We think, they can better smell with the mouth open. Also for scaring enemies away, if they see the Laughing Worms teeth.

Not a danger at all for humans.

If you run into one of them and take some time, they can come to you. Make sure that you have something to eat for them, then the worms will stay longer. If not, they will lose interest very fast

and leave.