The battery health drop percentage is not related to charge cycles. This is overall battery health based on charge capacity left and is determined and affected by several external and internal factors. iPhone batteries, like all rechargeable batteries, are consumable components that become less effective as they age. You should change out the battery once your Battery Health reaches below 80% which will take over 2 years to reach under normal usage. Until then enjoy your iPhone.
Here is some more reading on an iPhone battery and its performance ➡️ iPhone Battery and Performance - Apple Support
I have an iPhone 13 Pro Max and an iPhone 14 Pro Max. Both have iOS version 16 installed on them. The battery is fine. iOS versions do NOT make a battery bad. In the end, it is up to you to decide whether you should update or not.
Axel F.