It never understood what emotions are. After all, it was an Incubator, and Incubators don't understand emotions, they just toy with human emotions. But, Kyubey understands know, and realizes the errors of its ways, or does it?
After Homura rewrote the universe, due to her extreme love for Madoka, Kyubey thought about its actions. Since the simple allowing Puella Magis to turn into Witches to collect the energy needed for their research has been screwed by the Laws of the Cycle, the Incubators decided to mess with human emotions. But that plan was screwed by Homura's emotion, love, which caused the rewrite of the universe and disappearance of the Law of the Cycle, causing Madoka to be reborn. So how else are they going to get their information?
Kyubey always thought of those possibilities. Maybe it could try to bring back Witches? After all, Puella Magis turning into Witches produced the most energy needed, but wouldn't the Law of the Cycle return again? Madoka is overly kind, so her wish could be remade, if Homura decided to prevent her from being a Puella Magi again. But couldn't she make a different wish?
Maybe it was never meant for Incubators to understand human emotions, for they are so complex. And Kyubey learned that the hard way.