To answer your questions:
Similar to Mullvad Browser and Tor, Waterfox is specifically based on the Firefox ESR branch. Firefox ESR is essentially an “LTS” branch of sorts for Firefox, so this means that feature upgrades and changes are less frequent compared to the main branch. However, Firefox ESR will still get security patches and fixes to cover security vulnerabilities as they arise, so you don’t need to worry about security compared to Firefox mainline. But, Firefox ESR typically gets a major upgrade to a specific snapshot-in-time version of mainline Firefox once a year. You can read a bit more on the Firefox ESR release schedule here, if you are interested in learning more. Translating to Waterfox, it seems to be getting updates around 2 to 3 times per month, as indicated on their release changelog. So, I can reasonably conclude that Waterfox is being kept relatively up-to-date with the Firefox ESR branch.
Is it a good idea to switch?
Whether or not you would like to switch is mostly up to your personal needs/want and what you prefer on whatever your ideal browser of choice is. However, here is my advice: If you want a Firefox fork that just strips out the Mozilla-specific branding and add-ons (like the ads, AI, “news” articles, Pocket, etc.) and doesn’t frequently introduce massive features and UI changes (inherited from Waterfox’s Firefox ESR base), but with an exclusive focus on usability and sane defaults, Waterfox is a very strong candidate. It does all of that without the hardening that Librewolf does in their Firefox build. So if that is what you are looking for, it is a very strong choice. This is one of the Firefox-based browsers that I am considering as well.
From what I can tell now, Waterfox and Vivaldi are the only two groups so far that have publically stated that they will not be adding any AI to their browsers. You can read Waterfox’s AI statement to Mozilla’s recent AI annoucement here. So, you can definitely be sure that there won’t be any AI in Waterfox anytime soon.
Notes for Transparency:
Just as a piece of awareness, Waterfox was temporarily owned by System1 at one point, which is a company that has roots in advertising technologies. However, I believe that it was a couple of years ago that Waterfox became independent and grassroots again, back under the control of the original creator of the Waterfox project, Alex Kontos. The ownership status currently is the same since then.
I hope that I was able to answer your questions and be of some help!