No. Niagara Falls demonstrates the opposite: potential energy converting to kinetic energy, which then dissipates as heat and sound.
Water at the top of the falls holds gravitational potential energy due to its elevation. As it plunges 50+ meters (167 ft), that potential energy transforms into kinetic energy (motion). Upon impact with the river below, the kinetic energy is dissipated—primarily as turbulent heat, thunderous sound waves, and spray—not stored as potential energy again.
Consider a ball thrown upward: its kinetic energy (motion) gradually converts to potential energy (height) until it momentarily stops at the apex. That's the classic conversion Niagara Falls does not illustrate.
Hydroelectric plants at Niagara do capture the kinetic energy of the flowing water (via turbines) to generate electricity—effectively converting kinetic energy into electrical energy, not potential.