Dismiss lightly, in a funny kind of way (5,2,3)

I believe the answer is:

laugh it off

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'a funny kind of way' is the definition.
I know nothing about this answer so I cannot tell whether this works.

'dismiss lightly in' is the wordplay.
'dismiss' becomes 'laughoff' (laughing off is a kind of dismissing).
'lightly' becomes 'it' (I am not sure about this - if you are sure you should believe this answer much more).
'in' is an insertion indicator.
'laughoff' going around 'it' is 'LAUGH IT OFF'.

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