Pre-VII is purely speculative so I don't want to say anything that is not implied at all. Yes, Sephiroth laughs about his own mentioning of his family situation and very shortly after showed that he disrespects Hojo. One could say he in particular laughed about the fact that he knew it was Hojo but we really only have him noticing that he for no reason gave Zack personal information about his life and therefore laughed and himself wondering why he even told him about his personal life.