This is what Azula says.
Come on. That whole scene is about getting out everyone's true feeling. That was the ONE moment of emotion from Azula. I think she was telling the truth. Or atleast what she understood it as. So she thought her mother thinks of her as a monster. That kind of thinking is not that easy to come up with without some truth to it.

Well this is my opinion atleast. I haven't read the comics. But I've heard that there are some little developments regarding Azula and their mom or something.
 
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