I don't think Will Smith was laughing along at the 'joke' until he saw Jada's reaction.
I think he was laughing along with CR's pre-joke patter and then when he came out with what he did it took a split second to register what had been said.
CR was entirely in the wrong to have made a joke about any woman's appearance and he is pretty despicable really.
WS was wrong to hit him but can you imagine how you'd feel, already keyed up with nerves / anticipation about being nominated for an Oscar (and say what you like it is still a big film industry deal to get one), and then a comedian humiliates your wife? Why pick on his wife, if he wanted to 'roast' someone, it should have been WS himself surely? Partners and kids should be off bounds.
Actually I hate this 'roasting' thing altogether. No good can come of it and it's low humour.
I think the whole thing looked very odd and stage managed, though I also believe it was not scripted at all. Strange that WS slapped him rather than punching him. Agree that it would have been far better if WS had gone up and taken the mic and called CR out for the comment.