That's fair, but I get the feeling Waterfox wasn't very profitable for them to begin with.
I personally use it because it fills the very specific niche of re-enabling support for the legacy add-on format by default. You can do this in Firefox and other derivatives, but it's kind of a pain and it's easily undone by updates. I don't know of any alternatives that do the same thing.
Tab groups like in the reply below, but also a number of other things such as a fully functional revival of DownThemAll (the webextension version still isn't as powerful), and a number of other useful addons from here.
Plus, I like to write my own complete themes, and it's far more convenient to package them into installable XPI files than it is to just use userChrome.css, since they can be easily distributed and updated automatically.
I don't care that much about privacy anyway. I don't really get why privacy geeks talk about Google collecting your searches while willingly keeping Mozilla telemetry (which is something W disables by default) on. What's the difference? I get why Google shouldn't be collecting external data but I have no issue at all with giving them the data I actually input. Plus Firefox has a lot more deals with bad privacy groups like Google, Fakespot, and Pocket.
You can't make the assumption that they got worse on privacy just because they got bought. They're open-source, show me the code.
Waterfox is said to be slightly faster. They also seem to have a lot more focus for development.
Waterfox disables some of the Mozilla BS, like Pocket and that weird redesign of tabs to floating, by default.