Is Waterfall a physical move? I guess that does actually make sense, since it's the Pokémon using its power to go against waterfalls, though the name just is kinda off-throwing, though I can't really say I agree. With the Water type HM's like Waterfall and Dive, I feel like they're just like Cut, Rock Smash, and all of those weak HM's that are just put in for progression, which you usually just teach to an HM slave. So while Dive can also be an effective way of using an AoE move without damaging your other Pokémon, it isn't really strong in itself, and most of the moves like that (Surf, Earthquake) are weak against Water type Pokémon, so it doesn't help all that much.