How it Happened
How it Happened
[Cueball and his friend standing.] Cueball: Then she put her hands over mine, grinds against me, leans down and whispers, "After tonight, we go and live our lives, no regrets. But I want this, I want you, one last time."
Friend: (Giving a thumbs up, pointing, surrounded by action lines) That's what SHE said!
[Both continue to stand.] Cueball: Yes. Yes, it is.
[Both continue to stand.]

The phrase " That's what she said! " is commonly used after someone has described something that sounds sexual but had no intentional sexual meaning. An example might be:
"It's huge!" (Describing an overly large object like a large tree) "That's what she said!" (Implying that "she" had said the same thing about genitalia)
However, in this comic, the first guy is actually describing what his girlfriend whispered to him on the day she leaves him. She is still looking to have sex with him one last time before they go live their lives. It is a very personal moment that he decided to share with his friend. But his friend then responds with a that's what she said .
The first friend derails the other's attempt at a joke by pointing out that that was what she literally said. This is exactly the same as Megan's reaction to a "that's what she said" in 366: Your Mom .
The friend is simply frozen in his uncomfortable position, by the awkward moment, while the first guy just stares at him.
In the title text, the first guy continues to make the situation more awkward for his friend by pointing out that he was there, so there is no need to tell him what she said.
"That's what she said!" jokes had been mocked previously in comic 174: That's What SHE Said .
[Cueball and his friend standing.] Cueball: Then she put her hands over mine, grinds against me, leans down and whispers, "After tonight, we go and live our lives, no regrets. But I want this, I want you, one last time."
Friend: (Giving a thumbs up, pointing, surrounded by action lines) That's what SHE said!
[Both continue to stand.] Cueball: Yes. Yes, it is.
[Both continue to stand.]
