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It's interesting, there are a lot of comedies like this. A portion of the audience are either laughing at, or with the protagonist and both sets can equally enjoy it. For example, The Office: when Brent creates awkward situations some are laughing at him in pity. Some are honestly laughing with him and how he offends others. Curb Your Enthusiasm, Alan Partridge, Blackadder etc.
Squaredisk-
I'd argue that Alan Partridge is very clearly at the expense of Alan not the people he interacts with. But I agree there's definitely more comedies like Fawlty Towers where the line is blurred, the difference is they don't racially abuse the other party.
The example in my mind is the guy with the mole on Austin Powers, it's very similar to the German stuff in FT, the joke is meant to be at Austin but it's also clearly partly at the expense of the guy with the mole. Just replace mole with German and you've basically got Fawlty Towers except not xenophobic
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Same with Alf Garnett in Till Death Us Do Part.
Warren Mitchell assumed the character would be widely disliked for his small-mindedness and racism, but he became a hero to many for "saying it like it is."
Sumo
tbc
That may be the case for you, but I've heard way too many peope unironically quote the show in the real life to believe it's the case for the majority of the audience.