Waterfall is very useful when you have platforms above and can catch people off-guard. Since is most used for recovery, you won't mind diminishing its attack, its multihit and yeah, has a decent knockback. Thanks to Squirtle being one of the fastfallers, usually they don't have chance to hit you while you are falling (except for fastfalling characters or DI'ed stall-then-fall attacks, like sonic or ZSS). If you have a platform above you, and if it hits, you can safely fall and recover the lag frames after landing.
I don't know if it is as useful for up-B'ing after shield like ocasionally Charizard's.
I don't know if it is as useful for up-B'ing after shield like ocasionally Charizard's.