I don't believe they do. I'm pretty sure since its a soft fork and still has firefox as an upstream, that they would need the permission of any contributor that had agreed to the MPL license, and that would include the Mozilla project, and it's very unlikely that Mozilla would agree to that.

They would be better off using a dual MPL GPL license, but that would only be able to be done on software that isn't baked into the core browser/as a secondary plugin or library so it doesn't trigger GPL requirements on the rest of the project, so its unlikely that they could have it as integrated as they do with that type of licensing. (nor am I sure that the GPL even would allow it in the first place as GPL doesn't allow for relicencing to a stricter license. )

I don't see how not, but I'm not a lawyer. From my perspective only Waterfox's edits would actually be GPL anyway, since they don't own copyright to Mozilla. If they wanted to integrate their work upstream that would be an issue