The translation is: Sextus is an annoying boy who always annoys Cornelia.
Marcus laughs because Sextus always is annoying the slaveis the English equivalent of 'Marcus ridet quod Sextus davum semper vexat'. In the word by word translation, the noun 'Marcus' means 'Marcus, Mark'. The verb 'ridet' means '[he/she/it] does laugh, is laughing, laughs'. The conjunction 'quod' means 'because'. The noun 'Sextus' means 'Sextus'. The noun 'davum' means 'slave'. The adverb 'semper' means 'always'. The verb 'vexat' means '[he/she/it] annoys or harasses, does annoy or harass, is annoying or harassing'.
It means "what is it that ... you." Because "te" (you) is accusative there must be a verb or some kind of predicate missing, and "te" is its argument. If a verb was added, like "vexat," which means "he/she/it agitates, troubles," the sentence would mean "what is it that agitates you?"