It’s based on character alignment in Dungeons and Dragons. It’s somewhat complicated and I don’t fully get it, but the general idea is that lawful characters follow laws (including personal views and societal norms, I think), chaotic characters tend to disregard and even reject them, focusing on their own freedom and behaving more chaotically, good characters seek to help others and follow a moral code, and evil characters seek to harm others, especially to their personal benefits. Neutral characters in an axis behave mostly like normal/average people, generally leaning towards lawful and good, but unwilling to make significant sacrifice and capable of succumbing to temptations.

As for what makes seating positions take certain places on the chart… Yeah, no, it’s just personal opinions without too much thought put into a joke. Generally though, IMO, lawful/chaotic would be about following/rejecting the letter of the rule, whereas good/evil would be about following the spirit of the rule. So lawful good sits correctly, lawful evil technically follows the rules but does it intentionally wrong, chaotic good tries to keep a healthy position while ignoring the guidelines, and chaotic evil just does it as wrong as possible.