And a browser that has just been sold to System1, so whether it is still such a good privacy focused option I sincerely doubt.

It's good until it's going to be FOSS, if they change this privacy on Waterfox is gonna be questionable

Is running Legacy add-ons a good idea thought? Isn't there a reason Mozilla is very strict about this?

I guess that depends on the type of legacy add-on? Anyway, I guess people who deliberately choose Waterfox know what they are doing 🤣