For cinephiles, it's a joke that not only gives a nice tip of the cap to its actors, but also a big middle finger to the fully erect action genre of the time that refused to have fun with itself, and just wanted to stare at its own biceps in the mirror. The fact that neither Platoon nor Apocalypse Now (both movies being the Sheen's biggest respective critical hits) are even mentioned effectively makes them null and void to the Hot Shots universe, a universe that instead chooses to recognize the much dryer number-crunching of Wall Street. Related: Airplane! and Naked Gun Director Takes a Shot at Cancel Culture Going one more further still (are we now breaking the fifth wall?), this cameo is a joke that slyly loves cinema.
Going one further and recognizing that this movie is directly spoofing Sylvester Stallone's Rambo (a series that delights in its own war zones), then we realize Abrahams has managed to mock the entirety of the action and war movie genres as a whole it's magic.