Please don't list this on a work's page as a trope. Examples can go on the work's YMMV tab.
Nightmare Fuel: Embers
The Haima-jiao in the Ba Sing Se Arc. It could travel through any water way connected to the lake, which were implied to go through the ENTIRE city and no one could tell it was there until it's too late. And the fact that it basically mindrapes you into feeling hopeless and alone so that you just want the loneliness to end at any cost. Zuko was pretty freaked out after his run in with it during the Dai Li training session and it failed to get a good grip on him. Can you blame Amaya for being a bit traumatized after her encounter?
The Drowned. Dead things that you kill only for them to keep coming. And there are literally thousands of them. And we have no way of knowing whether Dragons' Wings is the only place they're showing up or if there are Zombie Invasions occuring elsewhere.
The Sea Serpent. Which is darkly hinted to be a cannibal if the line about the elders holding back a mother crying for the loss of her baby and its thoughts about how sweet the young flesh was is anything to go by. And it can get into people's heads and twist them. And the victim may completely miss something screwing with their minds.
The author's description of what Azula intends to do to Min.
Not to mention Vathara's presentation of Spirits. The Plague Spirit was bad enough, then she had to go and make the Haima-jiao... * Shudder* This troper had to tell herself that turning off the computer and going to bed was perfectly safe for over an hour before she actually got the courage to move.
And then there's the fact that loyalty bending, as shown in Embers, works in real life. No bending required. In fact, the main difference between loyalty bending and the Milgrams' experiment, etc, is that loyalty bending is a lot easier to resist (by knowing another firebender, for example). In other words, in real life, what Azula intends to do to Min is a whole lot easier. Between that and the reasons she gives for Katara's view that Zuko is driving the others around him insane (all of which are perfectly valid) and her hatred for him in general overwhelming even her determination to be a good person, Vathara seems to delight in exposing the reasons why rationality is a happy illusion. It's not even Humans Are Bastards. Someone has to be in control of their own actions to be judged a bastard.
Chapter 31 has the letter from Monk Yuan-ti, and while everyone else is horrified to hear it, Aang shrugs it off like it's nothing:
"Several of our younger sisters, especially among the bearing, were most distressed to witness the Avatar's will. I counseled the elders to bring all back into harmonious accord, as while mercy and compassion are tender illusions, they yet cause the spirit to remain attached to things of this world, and must all be pruned away. Else as you know yourself, one will desire more of what can only pass away and be forgotten. And how, then, would we know the transcendent joy of teaching our pupils freedom, if those who bear them will not give them up..."
Chapter 56 touches on 'Quality Time with Daddy':
The princess had a satisfied smile on her face. "The records say Great-Grandmother loved this place."
Mai let her brows climb. "I've never heard much about Fire Lady Tejina."
"Oh, she was interesting." Azula stared at dancing flames. "She recorded just how close you can bring someone to lava before their hair starts burning off. Among other things."
...And maybe I don't want to hear much now. "Where did you read that?"
"Oh, Father read it first. He told me the stories, every night. The executions, the interrogations... what?"
"These were..." Mai swallowed, somehow not surprised at all. "Bedtime stories?"
"They were mine." Azula looked stubborn. "Zuko had his time with Mother. Father spent time with me."
Chapter 89: Say Goodnight, Ozai:
Dark as blood, silk struck phosphorescent water-
Sokka's eyes widened, and he jerked his gaze away, wishing he could bury himself in Appa's fur. Wishing, for one desperate moment, he was as blind as Toph.
Dead hands in water. Empty eye sockets. Snapping teeth.