The most obvious usage of this is in the exposition from Out of the Silent Planet just before the final act. The Sorns 'seldom got beyond irony'. The Hrossa are extravagant and fanciful. Of course, it would be a trifle on the nose to have all members of a given race of culture have uniform senses of humour.
Little snapshots of life are presented by this; what are the norms of this society, the exterior elements to it; what do people feel they can laugh at. Wolfe does it very nicely - some of the jokes are even funny, and if The Book of the New Sun is lacking anything, it may be humour.
Does this mean that your characters have to be constantly making puns, or going on flights of fancy, or making cutting personal remarks? No, never constantly. But having a good notion of what would make them laugh, or what the world around them thinks will make them laugh - that is something else.