This is kind of an interesting story. From what I can gather, the name of the island was always written the same in Japanese, using...I think katakana (I don't know enough about moonrunes to know how these things work exactly). The literal transliteration of the characters is something like "ra-fu-te-ru." So when everyone official or otherwise was first translating that word some 25 years ago, they came up with the reasonable assumption of "Raftel" based on how these things usually work. The English phrase "Laugh Tale" apparently first appeared on-screen in the movie Stampede of all places, and then Oda confirmed in a chapter note somewhere in the 900s that "Laugh Tale" was the intended translation. I don't know whether it was intentional vagueness on Oda's part, or whether he realized at some point, "oh hey I should clarify this." If it was intentional then it's not all that dissimilar to the pirate Gold Roger's actual name being Gol D. Roger. Long story short, it was always "supposed" to be Laugh Tale, but no one has any way of knowing that before it was explicitly stated. Funi switched over to that translation after it was confirmed.
As to whatever significance that name may or may not have...you're gonna be here a while.