You are right about the use of en when it is a personal pronoun.

en usually refers to a previously mentioned noun or noun phrase that’s preceded by the preposition de.

The difficulty in the present case is that there are two de one is expressed, the other is not.

En train de is a phrase that must be followed by a verb and that is not the one we should be looking at.

We also have rire de (followed by a noun phrase) and that is the one to consider. But de is not explicit here, which is why you missed it although your initial understanding of the sentence was correct.

You can see the sentence as:

• Je ris encore de la pièce/ de la soirée d’hier. → J’en ris encore.

But since the whole context (the evening, the play…) has just been mentioned there is no need to repeat it, we express it with en.

It refers to “still” as I am still laughing at it (knowing the event happened in the past and is other)

Hope it helps
LT