Macbook 14 inch 2021 Battery Health dropped to 99%

62 cycles is about 7% of the 1000 cycles these batteries are rated for, where one is expected to replace the battery when it drops to 80% of original capacity, or after about 5 years of constant use, which ever comes first. Loss of 1% capacity is loss of 1/20 of the way to loss of 20% (80% capacity). So your battery is behaving as expected, maybe even a shade better than expected, as you have been through ~ 7% of anticipated lifetime but appear to have used up about 5% of the charge lifetime (end of life being 80%).

As comparison, my MacBook Pro is at 91% after 3.3 years, so at that rate it should last a bit more than 7 years total.

The "noise" in these readings is a few percent. So what you are seeing is probably indicative of the limits of the accuracy of these projections. I have seen these numbers go down (lower) over time but also increase as well. They are not super accurate.

Before drawing any conclusions, I would wait until you have gone through at least a good fraction of the expected battery lifetime, maybe several hundred battery cycles, or a few years. Then look at the readings.

I would not monitor these battery readings obsessively. Computer batteries are much like automobile tires: they wear out over time the more they are used, and even if not used, they degrade over time. But all batteries (and automobile tires) eventually wear out. And some last longer than others, for unknown reasons. I have some older computers. One, a MacBook Air 2013, had a worn out battery after 6 years. It was replaced with a new battery. I also have a 2010 MacBook Air, and its battery is showing 83% capacity, but several years ago it was showing 81% capacity. So it got "better?" Again, these readings have some "noise" on them. Why is one battery still working ok after 10 years while the other failed after 6 years. No one will probably ever know.

The more modern Macs running Monterey and Ventura have active battery management built into the operating system. It keeps the battery from staying at 100% for extended periods, which is known to degrade battery health. It will often keep batteries at close to 80% when the laptop is connected to a charger most of the time, to prevent degradation of the battery. As long as you allow this battery health management to stay active, your battery will get maximum life. It can be replaced when it wears out. My 2013 MacBook Air battery was replaced for less than $75 and the new one has twice the capacity as the original.

Yes, it's normal and expected.

Battery capacity does not diminish in a linear manner so it is not possible to extrapolate any expected future capacity. Its capacity may even increase from time to time, but the long term trend is down.

Batteries are a wear item, like the soles of your shoes and the tires on your car. Their expected lifetime depends on use (as reflected in Charge cycles) and also in the passage of time, used or not. After a while, you should expect to have to replace the battery. 

Battery life  also depends on two factors you may be able to control a bit better. Lithium polymer batteries deteriorate when they get too hot, and when they are subject to very deep discharge. These should be avoided when possible.

Despite using these batteries in millions of Apple devices, there is still a lot of of randomness in exactly which battery will fail when.