Yes he did, and I am not sure why you replied the way you did. You didn't reply to the joke, you didn't try to entertain the idea, you simply insulted him on the spot with no "/s" implied prior or later during the show. That might be different off-camera, maybe you guys are Okay with it but objectively your reply at that moment can only be considered as rude or a complete lack of sense of humor. I really never saw that kind of real life "troll" environment in a work place except when people pretend that everything is fine to keep their job, I consider my coworkers to be very trolly but at no point would I insult or belittle them without a smile on my face.