Back when the first season was about to air, Nick.com released a game called “Welcome To Republic City” where you could explore the new setting for the new series. When you go to the Zuko statue (also seen in the series), the info card on it identifies Zuko as alive and living with his daughter, the Fire Lord.
It wasn’t until this season that the show addressed Zuko, even with last season’s Iroh appearance.
-Da7e-