Seems to me he uses “nasty” as a child would, i.e., almost anything short of outright praise (and cuddles).
Agreed. It doesn’t have the import people are claiming the word “nasty” infers.
But it’s still reported speech.
It’s also still not the kind of thing a President would usually say about a high profile royal, when about to visit them. They’d just say I didn’t know that, or something better than that, like “we all have our disagreements.” He went for a personal attack. It’s a minor example of what he usually does but imagine if Obama or GWB had ever said something similar.