Why doesn't Sherlock understand the joke?

Question

In Sherlock S04E01, when Lestrade asks John about his fatherhood and if he is getting any sleep, John makes a reference joke (Sherlock being the baby) and Lestrade joins in too. But Sherlock doesn't seem to understand their conversation. Following is the transcript:

LESTRADE: You’re at the beck and call of a screaming, demanding baby, woken up at all hours to obey his every whim. (He looks pointedly at Sherlock.) Must feel very different.

SHERLOCK: I’m sorry, what?

JOHN: Yes, well, you know how it is. All you do is clean up their mess, pat them on the head.

SHERLOCK: Are you two having a little joke?

JOHN: Never a word of thanks. Can’t even tell people’s faces apart.

SHERLOCK: This is a joke, isn’t it?

LESTRADE: Then it’s all, ‘Ooh, aren’t you clever? You’re so, so clever!’

SHERLOCK: Is it about me?

LESTRADE (as an aside to John): I think he needs winding.

JOHN: You know, I think that really might be it.

SHERLOCK: No, don’t get it.

But in S03E02, Sherlock himself admits to John and Mary that they won't need him around, as they are expecting a real child. Following is the transcript:

SHERLOCK: You’re already the best parents in the world. Look at all the practice you’ve had!

JOHN: What practice?

SHERLOCK: Well, you’re hardly gonna need me around now that you’ve got a real baby on the way.

Source: http://arianedevere.livejournal.com

So, why didn't Sherlock(of all the people in the world), understand John's joke about him (Sherlock) being a little child?

Answer 1

Sherlock is neither very self-aware nor very good with the nuances of innuendo in other's conversation. As Tetsujin says in a comment he has some of the characteristics of Asperger's syndrome, finding it difficult to pick up on the feelings of others.

This is a repeating theme in the show. He constantly shows little awareness of why other people might not want to leap immediately to do what he wants them to do. For example, he calls Lestrade because he is having difficulty with his wedding speech but in such a way as to lead Lestrade to thinking it is an emergency and having to abandon a major arrest. He similarly misreads Molly at a christmas party by explaining the purpose of her christmas present without realising it is for him and that his explanation will, therefore, be upsetting in the extreme to her. The show plays this characteristic for laughs, but it also show Sherlock's repeated unawareness of the current feelings or situations of the people around him.

In this particular set of dialogue John and Lestrade make a point of spoofing his normal behaviour by comparing it to a newborn baby. It is funny, but also an important way of emphasising Sherlock's character.

But Sherlock isn't stupid and can understand people and their actions/motivations when he thinks about them rather than just reacting to them. He has thought about John and Mary's impending parenthood, so he can make an intelligent and insightful comment about that. But here, he isn't reacting to an immediate situation, but making a statement that he has had plenty of time to think about. Hence the apparent contradiction between the two scenes.