So I've been researching waterfords and chain bits more here's what I've come to realize. They aren't for me, but they aren't as bad as some commonly used bits, referring only to the mouthpiece portion and comparing the mouthpieces apples to apples (not taking into consideration the rider or the horse's level of training). That's my disclaimer ;)
It looks harsh, and it certainly can be pinchy, but it's completely collapsed in there mouth and without a decent amount of pressure it's pretty much not doing anything. The thing that makes it harsh (IMO) is that, like a twisted bit or a waterford, the pressure is centralized to more narrow points. So like walking on ice, distributing the weight is less intense, which is why smooth mouthpieces are generally desired. But compared to a twisted snaffle a chain really doesn't seem all that harsh to me. At least it doesn't nutcracker on their bars or potentially hit the pallet. I would, of course, pick something milder for my own horses I think a chain would be among the last bits I would use. But I can see why it's not so bad and I'd use a chain bit before a twisted snaffle or curb. But I'd probably use a waterford before a chain... But I'd probably use a loose ring snaffle (preferably french link) before a waterford ;) see where I'm going with this?
My horses were all trained in full cheek french links and an Indian Hackamore, they go in whichever they do better in for whichever mission I have for the day.
But back to the OP, you could try changing bits but don't get anything with a strong nut cracker action or that'll come as a shocker for the horse. Waterfords or french links might be an ideal step down, of course you ought to try some ground work in each bit before jumping on ;) You could eventually transition to something milder like a french link or a mullen mouth depending on the horse's preference, but I'd skip the single jointed snaffle step as it has a completely different action compared to the chain. You could even look into those leather bits - I'm going to get one just to try it out!