Now I'm about as big a Karlach fan as you can get, however honestly I'm glad this didn't make it into the final game.
Just gathering a discussion about it and bringing it to light

That said, it was originally thought to be cut content but the VA is hinting on twitter that it's just obscure (so maybe it is in the final game). Will investigate gamefiles if this is the case and update.
Edit: Found it. For that one random person who stated that the header of the dialogue file says that they (Larian devs) don't know what to do with it yet, I see no such thing. It's under /Dialogs/Companions/Karlach_InParty_Nested_FourthWall.html if you datamined the dialogs yourself or through the online repo. Gist/code source:
https://gist.github.com/Invuska/a8901dbf2dd85438aee73f5864f26345P.S. Spent way too much time trying to pretty print the HTML to a simpler text file but I'm apparently too tired to make the script work correctly right now. Maybe tomorrow.