The Batman Who Laughs is an evil version of Batman who originated from the Dark Multiverse. After killing the Joker, he was infected with Joker Venom that slowly corrupted him and turned Bruce into a twisted amalgamation of Batman and Joker. He is the team leader of the Dark Knights and their goal was to help their master Barbatos plunge the Multiverse into complete and utter darkness.
Official illustration of The Batman Who Laughs from DC's Year of the Villain Special (Volume 1) #1.
Lore
According to Eric Stirpē, the main lead writer for MultiVersus, all Fighters from the DC universe in the game are original interpretations that take inspiration from various incarnations without adhering to any adaptation in particular.[1] It's currently unclear if this also refers to Substitute Variants like The Batman Who Laughs.
Trivia
During his attacks, The Batman Who Laughs uses his scythe instead of the default crowbar and his flail instead of the default fish.
Furthermore, many of the Joker’s other props are retextured to have a red and black color scheme for this variant.