The hard fork was "Waterfox Classic", which just became unsustainable to maintain.
Rather than support for XPI (which is just the packaging for Firefox webextensions), the current version of Waterfox does still support bootstrapped extensions - in theory anyone can still write one, with access to all the privileged JavaScript APIs typically not accessible to MV2/MV3 webextensions.
It's not widely used though, there are two repos I'm aware of that take advantage of this:
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The hard fork was "Waterfox Classic", which just became unsustainable to maintain.
Rather than support for XPI (which is just the packaging for Firefox webextensions), the current version of Waterfox does still support bootstrapped extensions - in theory anyone can still write one, with access to all the privileged JavaScript APIs typically not accessible to MV2/MV3 webextensions.
It's not widely used though, there are two repos I'm aware of that take advantage of this:
https://github.com/xiaoxiaoflood/firefox-scripts/tree/master...
https://github.com/onemen/TabMixPlus/