Things haven't been going well. An understatement perhaps, with the Hero of Time sulking and trying to ignore everyone. Or more precisely, one person.
Quite frankly, Impa does not understand why he is behaving so childishly. There were very obvious, very good reasons why Zelda needed to disguise herself; it wasn't as if she had deliberately set out to deceive him. And the boy should really be thankful that she had even gone as far as she did, risking her life just to teach him the songs. Really, such an ungrateful boy.
Though, Impa admits to herself, she is glad that she had known about Sheik from the beginning and didn't have to go through such betrayal herself.
Even though it was quite necessary.
Zelda is frustrated. She is trying her best to be understanding, she really is. But he just keeps shutting her out.
On one hand, she does wants to apologize. She knows she hurt him, badly, when he realized that she had been lying to him all along and Sheik had never existed. But on the other hand, the longer he sulked the more resentful she became.
Why can't he see how crucial it was for Sheik's real identity to be a secret? So maybe it was a slight betrayal, especially since he had been asleep for about seven years and is still a child really. But still. It wasn't even like he knew Sheik all that much better than Zelda; Sheik may have been around Link for weeks and weeks while Zelda had only been with him for scant minutes, but considering how little she had actually interacted as Sheik, it did not make much of a difference at all.
Besides, look at how quickly Ganondorf had found her when she stupidly revealed herself! And for his sake too! But Link did not seem to appreciate it at all. It was very unfair.
Secretly, she was glad that it wasn't the other way around. That when Link awoke as the Hero of Time he was still the same person she had met seven years ago. It would have hurt to have been saved by the Hero of Time only to learn at the last moment that it was actually Link, who counts as a childhood friend, and that he had been lying about it all along.
Although her actions had been very necessary.
He knows her actions were necessary. It hurt all the same.