Based on the measurements it collects, battery health management may reduce your battery's maximum charge when in this mode. This happens as needed to ensure that your battery charges to a level that's optimised for your usage – reducing wear on the battery and slowing its chemical ageing. Battery health management also uses the measurements to calculate when your battery needs a service.
While battery health management benefits your battery's long-term lifespan, it can also reduce the amount of time your Mac runs on one battery charge when capacity limits are applied. If your priority is making your Mac notebook last as long as possible before recharging, you can turn the feature off.