Defense
#Defense DidDid you ever try to climb a wall below a waterfall?
Waterfalls can help defend your cities in the following ways:
If the waterfalls are designed well enough, they could fall on areas that are likely to be used by enemies (or dangerous animals?) to enter the city.
The spray and subsequent mist helps hide the city. So it's harder for enemies to count the number of guards and spot weaker areas.
If a waterfall is falling in front of a door, it could be a cheap way to keep animals that fear water out of the city, while human will just get wet when entering. It is also harder for people entering to conceal weapons under wet clothes.