The way I see it, he was a good guy doing the wrong choices, he’s never been truly evil. It’s a technicality anyway, it’s not important whether he was a bad guy when he saved Aang. He’s the son of a powerful and evil dictator, he saved the main character while wearing an oni mask and ended up helping the main character ending his father’s reign of terror. Even Ozai physically reminds me of Kaido to some extent.