Laugh out loud about chap occasionally seen in pub (5)
I believe the answer is:
local
'pub' is the definition.
(one's local pub)
'laugh out loud about chap occasionally seen' is the wordplay.
'laugh out loud' becomes 'LOL' (abbreviation).
'about' is an insertion indicator.
'occasionally seen' means one should take alternating letters (letters taken on occasion).
The alternate letters of 'chap' are 'ca'.
'lol' enclosing 'ca' is 'LOCAL'.
'in' acts as a link.
(Other definitions for local that I've seen before include "Near at hand" , "bar" , "Near - one's pub" , "The familiar neighbourhood pub" , "Regional; a pub" .)