Is the existing conduit brass, if so that is allowed as the bonding conductor, if not brass I don't believe metallic conduit is allowed to feed a niche. The lug on the inside of the niche is for a bonding condutor pulled with the lamp feed, and encapsulated after termination. Typically there is also a lug on the exterior of the niche for a bonding conductor installed as part of the equipotential grid
If the brass conduit is visible at the deck/junction box, I would attach a bond wire to that and also to the grid if it's available.
I've been servicing pools since the early 80's. Of course at that time pools lots of pools were built in the 60's and 70's. A few from the 50's. Some of them used 1/2" steel conduit on the pool lights. Trying to replace a light fixture was almost impossible as the cord would swell up over time and the conduit would rust and scale inside. They would also completely rot creating a leak. Serviceman had tricks to free the cord in the conduit sometimes compressed air with some type of oil.
There were also plenty of light niches with brass conduit. They too would eventually corrode and cause water loss.
In the last 30 + years or so plastic conduit has been the choice. Usually 1".
The wet niches are available in stainless steel and PVC.
The niches do have a bond lug on the inside and the backside of the niche body. The inside lug must have a potting compound the encapsulate the connection. Inspectors want that. Some also wanted potting compound on the backside. That bond wire connected to the common grid which hit the steel rebar on a concrete pool or the steel panel on a vinyl pool.
The inside bond wire that shares the light cord conduit, connected to a lug on the deck box which in turn connected to the common grid. That bond wire has been an insulated type. NOTE: Lots of older pool had brass junctions boxes flush with the patio. Code requirement now is to have the deck box above the water level.
We have not installed wet niche lights for about 8 years. We install nicheless LED lights that utilize either a 2" or 1.5" PVC pipe. It depends on the manufacturer. No bonding, no grounding, 12V lights. Savi lights owned by Zodiac/Jandy pool products is our brand used commonly.
We do however, have to deal with older lights on renovation projects (as we are presently). Bonding those niches can be a challenge.
Making sure they are bonded is paramount and we will test to ensure this.
Anytime I have the opportunity and the customer has the $, we will eliminate the wet niches and install the LED's.
