I wanted to confirm that was this done intentionally for a joke (if yes, can you please explain it) or it was a careless mistake.
It is perfectly normal to write furigana (in hiragana) on top of English words for the audience, who are practically all Japanese, to understand and learn how to pronounce.
In addition, furigana is always added on top of English ...
Gin: "Not like that! Ka-wa-wi-i!"
Gin: "No! Ka-wa-" (here he chokes on his coffee)
Kagura says Ka-wa-wi-n the second time.
If so, though, I'd expect Gin to tell her to drop it rather than say the word from the beginning again.
No one can tell what the writers want Gin to say instead.