Azul's dream in book 7 is a pretty perfect example of how shallow and fundamentally flawed Malleus' idea of a "perfect world" for everyone is. And I also just think it's interesting.
I don't think it's necessarily trying to convey that Azul experiencing bullying was "necessary" for him to become better. Because the inherent flaw with this dream is that it doesn't make Azul's peers not bullies; it just makes him someone they wouldn't bully.
He's athletic, captain of the school's sports teams, popular, and something that stood out to me is that during his first appearance in the dream, he's described as being so fast that the commentators couldn't even make him out at first. All of which are things that are NOT true in real life, and are in fact reasons he was bullied.
Azul was overweight as a child, lonely, unpopular and not naturally gifted at anything. And he's described multiple times as being a very slow swimmer, something he was also bullied for.
Malleus' dream solves this by removing these traits. Which, yes, does result in a reality in which Azul never faced any bullying. But it doesn't address the root issue, which was that Azul grew up in an environment in which bullying other children was tolerated in the first place. Even if he doesn't personally experience it, that still affects him, and it shapes him into the bully we see him as in his dream.
