Yes, this credit does focus on efficiency, but does still allow the use of non-potable water. Notice that the rating system intent states "To increase water efficiency within buildings...." and does not mention potable water, so please consider the reference guide revisions as neccessary to align with the rating system language.
However, the "Potential Technologies and Strategies" section of the Rating System documents do still include "Consider using alternative on-site sources of water...." and thus it is still a potential strategy for earning this credit. It is an alternative compliance path and the submittal requirements for this will be included in the revised WEp1 Additional Guidance, which will be available soon.
LEED Specialist, USGBC