I can't separate the two different cases of using 'would' in this situation:

> "Oh no!" I said, and that's when I couldn't hold it in anymore.
> Everything that had just happened kind of hit me and I couldn't help
> it: I  started to cry. Like big crying, what Mom would call "the
> waterworks."

I hesitate between seeing this as a repeated action or an imaginary situation.
Could I get any help? 

If Mom was here right now, he would call it 'the waterworks'
When I was yonger, I used to cry. Mom would call my crying 'the waterworks'

I'm having a lot of trouble with 'would' now and I don't have clue how natives understand it immediately by the context.

Why does it mean what it actually means in this case? Where is the clue?