Yes it's another "soft" firefox fork similar to LibreWolf et al.
As regards what specifically is different, I don't know but my expectation would be that the patches waterfox applies are similar to librewolf and others.
"Usability" in 2025 is often in opposition to "Privacy". If you had a spectrum between Privacy and Usability and placed all the available browsers on that spectrum you'd have Chrome up at the Usability end and LibreWolf at the opposite "Privacy" end, and Firefox in the middle. My impression is that Waterfox is somewhere in between Firefox and LibreWolf.
Using LibreWolf as it comes can be a pain. For example all cookies are purged every time you restart the browser, so you have to log in to everything every time. Maybe this improves privacy but definitely gets frustrating. Another example is disabling canvas. This breaks a lot of sites in ways that might not be obvious. Your grandma couldn't use LibreWolf as a daily driver.
A soft fork basically means that the code provided from upstream is only modified in fairly minor ways. For example Firefox has pocket built in, and LibreWolf sets a flag at compile time to simply not include that functionality in the release (I think?). There is also the arkenfox user.js file which is used by a few FireFox forks, which you might consider as a way to set a lot of settings.
I don't know about WaterFox but a major consideration in these privacy focused browsers is how quickly they can propagate changes from upstream. If it takes a while to release a new version you can be vulnerable. LibreWolf says:
LibreWolf is always based on the latest version of Firefox. Updates usually come within three days from each upstream stable release, at times even the same day. Unless problems arise, we always try to release often and in a timely manner.