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Did Azula die in Sozin's Comet?

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No, she did not. Instead, due to her decreasing mental stability, she banishes everyone that works for her, including her Dai Li agents. Then, while she is at her coronation she gets into a battle with Zuko and Katara over the right to become Fire Lord, and is defeated, but survives. Afterwards, she has a mental breakdown and is sent to a mental institution.

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