what does the phrase "reversal or substitution of words, identities, or conventional wisdoms' with reference to comedy mean?
Well, reversal or substitution of words refers to, for example, Anthimeria. That's when one part of speech, usually a verb, but not always, is used for another part of speech, usually a noun, but not always; e.g. Comedy Central's Stephen Colbert co-opted the word "truthiness". From "truth" (meaning, something based on evidence, logic, intellectual examination, or actual facts) plus -y giving, "truthy", plus -ness giving, "truthiness" (meaning, things that we just believe because they feel right.