You're being a bit too literal. The name came from the resemblance of a diagram in the paper to a waterfall. The name wasn't meant to constrain the methodology to strict characteristics of a waterfall. The steps are meant to be followed in order. It is gated. But, nothing constrains the steps from being repeated. That is the crux of the difference between Dr. Royce's paper and what the military formed as a standard based on the paper.

I took a college comp sci course a few years ago. The professor talked for a few minutes about the Waterfall methodology. In short, she said "we in academia gaffed by promoting the Waterfall methodology for several decades. It's now cause for laughter in academic circles when someone proposes the Waterfall method for software development."