I’m not sure what the context here is, but as a lifelong NJ resident I can assure you that there are a lot more legal burdens here than you find in most other states. Of course we do ignore most of the driving laws
The context is a lyric in the musical Hamilton referring to the Hamilton-Burr duel, which took place in NJ. Apparently dueling was already illegal in NJ.
Lin-Manuel didn’t invent the phrase, and I wonder if the original meaning was more in the spirit of “New Yorkers can get away with violating NJ laws” rather than “New Jersey literally has no laws”.