Katara had been anxious to do some training since the nightmare, and she had thrown herself into this, staying focus. It didn't mean she was perfect, but with Tess's help, they were able to be a formidable match (JUST formidable) against Sheeana. When Sheeana had them stopped, she exchanged a knowing look with Tess, happy to be with her sister again. Once she introduced the man (he looked like a boy, but if Sheeana said MAN, there was little doubt) Katara paid attention. This was the one Sheeana had talked to her about. How exactly did you react to someone like him though?

Katara just gave him a polite bow, smiling. "It's nice to meet you Duncan: I am Katara, of the Southern Water Tribe."