The expression is used to mean something is “over the top” or “overdone” “grand”. It’s not a matter of foolish or bad. It may be used for good intention as well. For example: 1) “You’ve written some great material in the past, but this takes the cake!” Meaning, this is “grand.” 2) “He’s always had a good report card, but this one takes the cake!” It suggests a celebratory meaning as if he’s done even “better” than a previous report card. So just keep in mind that it could be used for two extremes to be “grand or great” or perhaps “the worst but in a grand way”...hope that makes sense. Best wishes.:)

The answer here is 'neither'. This is a classic example of a learner taking a dictionary definition too literally. Or perhaps it's an example of a misleading dictionary definition. @ Salvater Invictus 秋, you've obviously looked at the dictionary entry which reads "Take the cake: be the most remarkable or foolish of its kind." (Free Dictionary) and can't see how this relates to your sentence. Let's take a look at some better definitions of this idiom: "an outrageous example of something bad " "to be the worst, most shocking, or most annoying example of something" "to be the most extreme example" Is that any clearer? As you can see from these definitions, it doesn't specifically mean 'remarkable' or 'foolish'. It can refer to any kind of behaviour that could be seen as extreme in some way. If you say "He's done a lot of crazy things, but this takes the cake", it means that his latest thing is even crazier. In other words, it wins the prize for being the craziest thing that he's ever done. Likewise, if you say "He's done a lot of dangerous things, but this takes the cake", it means that his latest thing is even more dangerous. In other words, it wins the prize for being the most dangerous thing that he's ever done. A word of advice: It's always worth checking a number of different dictionaries until you find the best definition. It's important to take notice of the examples, as these will help you understand how words and phrases are really used. It's also useful to be aware of regional differences. You'll only come across this particular one in North American contexts, for example. (The equivalent elsewhere in the world is 'Take the biscuit', with the same meaning). I hope that helps.

It means this one gets the prize/1st place medal for the the most stupid thing he’s done.

“Take the cake” sounds more foolish in regards to the following sentence. The key word “crazy”.