Katara was all set to follow his instructions when he suddenly put down the weapon and began speaking. Falling into a relaxed stance herself, she listened to what he had to say. Or, at least, she tried to listen. When he started to ramble, she went from intent to slightly confused.
Her brow furrowed as she did her best to keep up with his train of thought. Yet by the time he'd finished speaking her eyes were wide and her mouth was hanging slightly open. Realizing that wasn't the best way to react to his acknowledgement that there was something between them, Katara shook her head and smiled softly.
"You're not wrong, Zuko," she spoke up, stepping a bit closer to him. The dao was back at her side and her attention was solely on him. "I feel something between us, too." She flushed at admitting such a thing out loud, but felt a little better once she'd said it.
She also felt more at ease seeing Zuko act so very human. She'd seen him make mistakes, she'd seen him go through all sorts of emotions in fact. But rambling, blushing, being generally flustered, those were all new experiences for her to witness. In a way, she found it endearing.