So waterfalls (probably) don't play chess in the sense that any mapping form the waterfall to a chess program would itself be as complex as the problem (and its execution). But a chess computer does, since its output has a very simple mapping to actual moves (and in practice, most chess computers add a view layer to provide that mapping transparently).
"The question of when a physical system is computing is fundamentally a question about the relationship of abstract mathematical/logical entities to physical ones [22]."
---
"The crucial assumption is that the abstract program, as a mathematical object, requires design and therefore intent. Accordingly, only artificial things can compute. We cannot say, for example, that a brain computes."
I would argue that living things represent the spontaneous emergence of teleology in nature (i.e., evolution doesn't itself have a goal but it implies the greater success of creatures which do have goals). Brains evolved to help organisms survive and reproduce by allowing them to better process sensory data. So brains were "designed" for an "intent" (survival/reproduction), in the sense that brains that did not serve the intent died out.
The author, and any reader who finds this interesting, should definitely also read "Why Philosophers Should Care About Computational Complexity" by Scott Aaronson: http://www.scottaaronson.com/papers/philos.pdf
This being the Internet, the natural assumption is that this is intended as contradiction or argument, but I really do just mean, you'll really want to read that too, as it informs the discussion in interesting ways.