"Of in" sounds similar to "oven". In the context of the joke, "of in" itself has two meanings, while at the same time sounding like the word "oven". When you say you "of in", there's a clever triple meaning at play: "of in" could be referring to three things: 1. the act of inserting the food into the apparatus; 2. the presence of heat emitted from the apparatus; 3. a pun of "oven". The joke then makes the claim that "of out" is the antonym of "of in". If "of in" means inserting the food, then "of out" means removing the food; if "of in" means heat is present within the food, then "of out" means heat is absent from the food.
Here's an example of a sentence that uses all the definitions of "of in" and "of out": When a food is considered cold, the heat from the oven is "of out" (absent from) the food; so you "of in" (insert) the cold food into the oven, then you "of out" (remove) the food from the oven once the heat from the oven is "of in" (present within) the food.
The punchline of the joke hinges on the origin of the name given to the apparatus, oven. The premise of the punchline insists the name "oven" has to come from "of in". If a claim is made that oven is named after the act of inserting cold food into the apparatus (of in), then according to the joke, it does not make sense, because the heat from the apparatus is absent from the food (of out). Conversely, if oven is named after the presence of heat from the apparatus within the hot food (of in), then it conflicts with the fact that hot food is removed from the apparatus (of out).
The humor of the punchline comes from the flawed logic used to deduce to origin of the name "oven". The logic is flawed in such a way that one who uses it to find the etymology of "oven" would simply be stuck in an endless cycle of speculation and end up never finding the answer they are looking for.
Wow. This is like decoding some extinct language without a Rosetta Stone. I only sorta understand the concept, but you must be commended for your explanation.