The message that you see would suggest that your iPhone battery is unable to meet “peak” power demands.
The indicated battery health is, we understand, principally established from the number of full battery charge cycles - an iPhone battery being expected to maintain 80% of its original capacity (when new) after 500 full charge cycles. A full charge cycle is defined as any combination of charging that together totals 100% (e.g., 50+30+10+10 = 100 = 1 full cycle).
By comparison, an iPad battery is expected to retain 80% of its original capacity after 1000 full charge cycles.
Having updated to iOS16.x for iPhone, this being a very early production release of the new Operating System, there may still be some bugs and issues. If you are concerned, you might be best advised to seek advice directly from Apple Support. You can contact the Support Team using the Get Support link at top-right of this page. Alternatively, you can initiate and manage your support cases using the excellent Apple Support App. If not already installed on your device, the App can be downloaded from the App Store:
https://apps.apple.com/gb/app/apple-support/id1130498044
You might also visit the Genius Bar at your local Apple Store or Apple Authorised Service Provider (AASP) - where the technicians will be able to test and assess your iPhone:
Genius Bar Reservation and Apple Support Options - Apple