What does "bless your heart" mean — and why is it funny?

informal, Southern US

Meaning

Literally a kind blessing — but in the American South it is often a sugar-coated way to call someone foolish, pitiful, or plain wrong.

Where it comes from

A genuine expression of sympathy that, in Southern US speech, grew a second life as polite cover for a put-down.

Why it is funny

The comedy is the gap between the sweet words and the real meaning. It lets the speaker say something cutting while sounding angelic, and every local listener knows precisely which version is intended.

Used in a sentence

"He tried to pay for his coffee with foreign coins and didn't even notice — bless his heart."