And everybody loses their minds

No, what he said was that if she weren't his daughter he'd be dating her.

That was his answer to a loaded question by a reporter asking him if she wasn't his daughter, is she the kind of woman he would date. His possible answers to this loaded question--"No, that's disgusting!" implying he doesn't think his daughter is beautiful. "Yes, she's a beautiful girl", implying he's a pervert because he wants to date his daughter. The best answer would have been, "What kind of question is that? Do you routinely think about me with my daughter you sick f*ck?!" That answer would never have aired.
POTUS is a master at trolling. Ask a creepy question, get a creepy troll answer.

You're talking as though there were one occasion where this happened. This was something Trump said quite a few times - it was a joke he was clearly quite fond of. Off the top of my head, he said it on his interview in The View, and in Rolling Stone magazine, and neither incident in any way matches your description - so that's at LEAST three times.

emphasis on the phrase JOKE. its a JOKE. do you understand what a JOKE is?