What she said was, “…a tzaddekes, as all our Imahos were, besides for Leah,
who was at the level of a baalas teshuva.”
I think she was referring to Chazal’s statement about baalei teshuva achieving
a higher level than tzaddikim (“b’makom she’baalei teshuva oimdim…”), and her
statement was presumably based on Chabad teachings. (She was using
“baal(as) teshuvah” in the classic sense, not the modern one, and she
did not mean to imply that Leah was not beautiful.)