Validating Password And Confirm Password Fields Whenever One Or The Other Fields Model Changes (Each Keystroke) With Angular Directive

Just change the last check:

ngModel.$setValidity('passwordVerify', !val1 || !val2 || val1 === val2);

to:

ngModel.$setValidity('passwordVerify', val1 === val2);

Here's a working version:

(function() {
  "use strict";
  angular
    .module('app', ['ngMessages'])
    .controller('mainCtrl', mainCtrl)
    .directive('passwordVerify', passwordVerify);

  function mainCtrl($scope) {
    // Some code
  }

  function passwordVerify() {
    return {
      restrict: 'A', // only activate on element attribute
      require: '?ngModel', // get a hold of NgModelController
      link: function(scope, elem, attrs, ngModel) {
        if (!ngModel) return; // do nothing if no ng-model

        // watch own value and re-validate on change
        scope.$watch(attrs.ngModel, function() {
          validate();
        });

        // observe the other value and re-validate on change
        attrs.$observe('passwordVerify', function(val) {
          validate();
        });

        var validate = function() {
          // values
          var val1 = ngModel.$viewValue;
          var val2 = attrs.passwordVerify;

          // set validity
          ngModel.$setValidity('passwordVerify', val1 === val2);
        };
      }
    }
  }
})();
<html ng-app="app">

<head>
  <script src="https://cdnjs.cloudflare.com/ajax/libs/angular.js/1.5.7/angular.min.js"></script>
  <link rel="stylesheet" href="https://cdnjs.cloudflare.com/ajax/libs/twitter-bootstrap/3.3.6/css/bootstrap.min.css" />
  <script src="https://cdnjs.cloudflare.com/ajax/libs/jquery/2.2.4/jquery.min.js"></script>
  <script src="https://cdnjs.cloudflare.com/ajax/libs/twitter-bootstrap/3.3.6/js/bootstrap.min.js"></script>
  <script src="https://cdnjs.cloudflare.com/ajax/libs/angular-messages/1.5.7/angular-messages.min.js"></script>
</head>

<body ng-controller="mainCtrl">
  <form name="add_user_form">
    <div class="col-md-12">
      <div class="form-group" ng-class="{ 'has-error' : add_user_form.user_password.$dirty && add_user_form.user_password.$invalid }">
        <p class="help-text">Enter password</p>
        <input type="password" class="form-control" id="user_password" name="user_password" placeholder="password" required ng-model="user.user_password" password-verify="{{user.confirm_password}}">
        <div class="help-block" ng-messages="add_user_form.user_password.$error" ng-if="add_user_form.user_password.$dirty">
          <p ng-message="required">This field is required</p>
          <p ng-message="minlength">This field is too short</p>
          <p ng-message="maxlength">This field is too long</p>
          <p ng-message="required">This field is required</p>
          <p ng-message="passwordVerify">No match!</p>
        </div>
      </div>
      <div class="form-group" ng-class="{ 'has-error' : add_user_form.confirm_password.$dirty && add_user_form.confirm_password.$invalid }">
        <p class="help-text">Enter matching password</p>
        <input class="form-control" id="confirm_password" ng-model="user.confirm_password" name="confirm_password" type="password" placeholder="confirm password" required password-verify="{{user.user_password}}">
        <div class="help-block" ng-messages="add_user_form.confirm_password.$error" ng-if="add_user_form.confirm_password.$dirty">
          <p ng-message="required">This field is required</p>
          <p ng-message="minlength">This field is too short</p>
          <p ng-message="maxlength">This field is too long</p>
          <p ng-message="required">This field is required</p>
          <p ng-message="passwordVerify">No match!</p>
        </div>
      </div>
    </div>
  </form>
</body>

</html>

I hope it helps.