Does battery health apply if I trade in my iPad 8th generation?

No - but your iPad must be fully working and otherwise free of technical faults for it to be accepted by Apple's trade-in program.

You can verify eligibility for trade-in and obtain an estimate of the potential trade-in value here:

Apple Trade In - Apple

Many Users choose to trade-in their iPad at an Apple Store in preference to using the mail-in service - as the device can be checked, the trade-in value finalised and the process completed while in-store. Be aware that Apple’s in-store trade-in values may differ from the on-line estimate.