The narrator's "friend" pickpocketed him. When boldly confronted by Truth, he cleverly twists her accusation to make it seem like she's confessing, and the narrator, bewildered by the laughter and manipulation, buys it wholesale. Bonus points for connecting it to broader themes like mass propaganda, commedia dell'arte, or the dreamlike setting and hypnotic repetition of phrasing.
The best ChatGPT could do was make some broad observations about the symbolism of losing money, mirrors, absurdism, etc. But it whiffed on the whole "turning the tables on Truth" thing. (Gemini did get it, but with a prompt that basically asked "What really happened in this story?"; can't find the original response as it's aged out of the history)