What is the ruling on saying "You, Shi'ite!" and what is the ruling on the listener who smiled upon hearing it, and is that considered an act of disbelief (kufr)?

The questioner is advised to ignore obsessive thoughts regarding matters of takfir (declaring someone an apostate) and mockery, and to occupy oneself with learning, inviting others to Allah, or permissible recreation. Apostasy does not occur merely by speaking or hearing. Nor does one become an apostate by saying to his brother, "O disbeliever." This is because the noble hadith, "Any man who says to his brother, 'O disbeliever,' then it has certainly returned upon one of them. If it is as he said, otherwise it has returned upon him," is meant as a deterrent and a strong warning against declaring Muslims apostates. It does not mean that whoever declares a Muslim an apostate becomes a major disbeliever. Sheikh al-Islam Ibn Taymiyyah, Ibn Qudamah, and al-Hafiz Ibn Hajar indicated that the hadith is to be understood as a form of strong warning and similitude, and that what returns upon him is the act of takfir, not kufr (disbelief).