It's a humorous and nonsensical phrase that doesn't really have a literal meaning. It's often used to express surprise, amusement, or disbelief.
Think of it like the English phrase "What a riot!" or "You're kidding, right?" It's a way to express that something is so funny, ridiculous, or unbelievable that it's almost painful.
The idiom is based on the image of a pair of jeans that is literally crying and laughing at the same time, which is impossible. It's a playful and whimsical way of expressing a strong emotional reaction.