Funny confusion of cam and coil (7)
I believe the answer is:
comical
'funny' is the definition.
(I know that funny can be written as comical)
'confusion of cam and coil' is the wordplay.
'confusion of' indicates an anagram (I've seen this in other clues).
'and' is a charade indicator (letters next to each other).
'cam' after 'coil' is 'coilcam'.
'coilcam' with letters rearranged gives 'COMICAL'.
(Other definitions for comical that I've seen before include "Amusing or droll" , "Rich" , "Humorous" , "'Amusing, funny (7)'" , "priceless" .)