No one knows, but it is likely a joke at the expense of the Prioress.
There are, as you have observed, multiple ways of interpreting this text.
It could be that Parisian French is radically different from the scholarly French taught at "the school of Stratford-atte-Bowe". It's not hard to imagine that the sanitised French taught in an English convent could be quite different to the rough dialect spoken on the streets of Paris. It could also be a matter of accent or skill: that she can recite genteel phrases but cannot actually converse or understand real French.
Given the multiple interpretations and the distance in time from the authorship of the text, we can never know for certain what exact meaning Chaucer intended here. However, we can infer what his intentions were.
Whatever the interpretation, the Prioress - alongside many other religious characters - is held up in the Tales as a figure of mockery. She breaks a number of rules of religious life, yet clinging to the mannerisms and rights her station gives her. She also has a habit of aping courtly ladies, which is not befitting to the role of a prioress.
Given this, whatever is wrong with her French it is clear these lines are poking fun at her "achievement" in trying to speak it. Indeed it may be a double joke. Not only is she taking on airs by claiming a useless skill, but since French was, at this point, the language of the English court, her having learned it at all may be another example of how she is imitating aristocratic manners in place of focusing on her religious role.
Reference: W. Rothwell, The Chaucer Review, Volume 36, Number 2, 2001