I think I had the same one about oral sex -- I first heard about it by reading about it and I couldn't imagine the "oral" part meaning anything else other than speech, and even that I had to think hard about and was confused while figuring it out. LOL! So I too thought it was must be about talking dirty to each other.
I don't know if this fits, exactly, but one time when my dad was taking us kids for a walk over forest land, we walked across a field that had a huge electrical pylon at one end. I was very young and at that time I'd never seen one that close, and someone made a joke about climbing up it. I didn't get the "joke" part and seriously thought that's what we were about to be made to do. I freaked out, crying and saying I don't want to climb up there. I've done a LOT of that kind of literalness in life: not getting that people are making a joke about something.
Another example of that happened just a couple of years ago. I'm interested in animals and wildlife, and there are centers that rescue injured animals, treat them, and rehabilitate them to go back to live successfully in the wild again following a successful repair of the injury, hence the word "rehabbing" them. I was talking to someone about animals that get "rehabbed" and she said something like "Because animals get nasty booze and drug addictions, hahah!" I know I looked at her completely dumbfounded, and I actually answered "Uh, no rehabbing is getting them used to living wild again after treatment....." It took several "beats" until the penny dropped, in my head, that she was kidding around. I felt stupid. It's part of what makes some people think I'm stupid, people who don't know me better than that.
Lots of people have said to me almost pityingly "Oh....you're so literal, aren't you?...."
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