In a way that is unexpected behavior but that does not make it bad.
As a rough average, Health decays at about 1% a month when over 90%. However, the parameter used to calculate "Health"—design capacity— is an average value across all batteries of that model, not a precise value for your battery. Yours may have started with an above-average actual initial capacity.
My 2013 Macbook Pro arrived with 102% health. Based on how averages work, that means some poor soul got a new one with a battery at 98%. 😱
Health is also non-linear. Very. These are battery readings from my older Macbook Pro over several years, logged using the Coconut Battery app:

Note the circled dates showing a 10% freelfall in Health in under two months, but then recovering to 82% less than two month later? Please don't obsess over something that cannot make up its own mind! Also note that the rate of decay seems to slow once you pass 90% Health.
New Macbook Pros have much better power management than my dinosaur, but mine still has the original battery (now over 11 years old) and its health is toggling between about 78 and 81%., and the system still reports the battery as "normal." Yes, runtimes per charge are not as long as when new, but are still enough to remain useful to me as a travel computer.
From a more technical side, Mac power management falls under the aegis of the System Management Controller (SMC). Discrepancies in reports related to power may be corrected by resetting the SMC:
Reset the SMC of your Mac - Apple Support
Note that you have an Apple Silicon Mac; use the set of reset instructions for that group.
Your battery may, like mine, have started with a higher initial capacity than the average design capacity. The system displays to 100% but not higher. What you see could be as simple as that.
How did I get 11+ years out of a battery that still does its job? Clean living I guess. All I do is:
- run the computer on battery about once a week
- connect the charger when the charge is between 20 and 40%
- avoid running the battery to zero if possible
I got the idea for the first bullet point from a fantastic Apple support article published long before the Great Dumbing Down of such documents before the Altar of Minimalist Design. The article compared an Apple notebook battery to a human muscle—both need a little exercise.