iPhone 8 battery life: Service warning indicated with 90% Maximum Capacity?

My iPhone 8 has a Max. Capacity of 90% showing, but is also indicating that the battery has significantly degraded. My understanding is that batteries are good to go until around 80% max. capacity, but the phone is indicating that an Apple Authorized dealer should be replacing it for max. performance.

Is this really necessary? This warning came up when the power nosedived two days ago and the phone shut off. It recharged and then displayed the battery status in Settings>Battery as needing Service.