Missing a bracket, script is poorly coded, and your first token in the string has to be one of the short-hand acros in order for it to replace. :(
on *:input:#:{
var %text = $1-
if ($istok(%text,lol,32)) { var %text = $puttok(%text,Laughing out loud,$findtok(%text,lol,32),32) }
msg $active %text
}
That\'s another way to go.