So, James gives speech about how his father attacked and left his mother after his mother laughed at his father.
Later, James tries to use a condom and she laughs at him inappropriately.
Then, James goes into hysterical laughter and says the whole story he told to her before wasn't true. And leaves.
So, is he lying when he told the story or lying when he's leaving (and the story is true)?
We're clearly watching this at the same time.
I thought that was a weird scene too. There's a lot of hysteria and hysterical laughing in this film.
I decided it didn't matter whether he was lying about the story vs. lying that the story was a lie, but that was yet another reason for her to roll her eyes, and not be into him.
It's just very odd. He builds up all that trust by going out with her platonically 5-6 times. Then confides in her enough to tell that story.
I get that her hysterical laughter would set him off. (He obviously has sexual hangups as a result of his mother and father.) And she's incredibly tone-deaf to not see that that particular action, laughing at him where sex is involved, would set him off.
It's just really weird for him to leave it like that, by denying the previous story. She's obviously the one who was out of line. And he doesn't even call her on it. He basically is making a complete, unilateral retreat.
I think I'd say the story he recounted was true. And he's still massively oppressed by it. His later hysterical laughter shows how ill-adapted to adult sexuality and relationships he still is. His saying the story was false is him trying to completely retreat from any intimacy with her. "Never mind. Forget what I said. Forget my attempt at tell you my darkest secret. See, it's all made up!"
But it's weird because later in the movie he still attempts to make contact with her again. After such a complete retreat and self-humliation, he really can't do that (without rehashing the whole incident, and she really doesn't demonstrate any capacity for non-superficial relationships).
I think if the acting or direction were better, the retreat would have made more sense.
Still, I think you're probably right--that the story was true, and he was backpedaling after he felt humiliating about the condom.
She was indeed tone-deaf and appeared able only to have superficial relationships.
otoh...the whole film is incredibly nihilistic - very 1970 postmodern - cynical and itself quite superficial.