Unfortunately for him, she finds it cute when he's all embarrassed like that. Why else would she make the jokes she makes? (Well, other than perhaps a part of her genuinely being attracted to him, but she's more attracted to him as a person than otherwise which she finds so much more significant.)

She's about to say something to that effect when he murmurs his reply, melting what of her heart he hadn't already. Carol sees that effort. So as a reward she decides not to make him proverbially squirm any further by telling him more about how wonderful he is.

Instead: "It's damn sexy when you say things like that." Because it is, but more because joking with him feels normal and comfortable and like a different way of appreciating his words without being all mushy.

She is well aware this might also embarrass him in a way but his head is in her lap and she sidestepped that one, okay.