It's a pretty bad joke, and not just because it manages to belittle women and victims of human trafficking, but also because Bragi's excuse for making the joke is a really tired one that needs to be addressed: "We Icelanders often use irony and humor to deal with less than fun situations."
OK, well, first of all, this isn't his situation. It's hers. If she wants to make light of it and make fun of it, she's welcome to. Although she'd probably run the risk of offending others who are or have been slaves, she's at least a bit more entitled to laugh it off than a lawyer in a first-world country.
Second, he explained that it's hard for us, as Icelanders, to accept that these terrible things happen here. That's why he made the joke. Wait what? Then why did he make light of her situation; not Iceland's?
This is what's called "humor of privilege" - laughing down at people in worse situations than you are or ever will be. It's arrogant, cruel and snide. And when people who use humor of privilege are called out on it, the response is usually something like "I'm politically incorrect" or "I'm a dark and edgy person" or, my personal favorite, "You need a sense of humor."
This isn't humor, though. It's just mocking people who are worse off than you are. And if Bragi had any sense of integrity - especially as a lawyer who's defended human traffickers - he'd admit he misspoke and apologize accordingly.