This Maxim is about respect and I would go so far as to say it could include not trying to score verbal points because someone has passed to the next world. The dead cannot defend themselves and often when someone would be “making fun” at their expense they are also not considering the grieving family’s feelings on the matter. This is especially true if the person involved has died by violence, for example as a result of war. It becomes very inappropriate at times like that to treat the dead with levity.
In ancient times this Maxim would have been especially important as the descendants of a person were tasked with making offerings at their tombs and would not want the dead to be dishonored by someone using them as a source of levity. Even in the modern day, people who make jokes about the soldiers who have died in our wars or the victims of the World Trade Center bombings are told that the jokes are inappropriate. The jokes themselves are held with disdain as are the people making them. This is from a culture that does not honor the dead the way our ancestors used to. Imagine what it would be like if we did do so.