"Battery health" is influenced by many factors, but in the main by the total number of full recharge cycles that accumulate over time.
An iPad battery is rated to retain 80% of its original capacity (when new) after 1000 full recharge cycles. Any combination of charging that together sums to 100% equates to one full charge cycle (e.g., 50% + 20% + 20% + 10% = 100% = 1 full charge cycle). As such, excluding other factors, simple math would suggests that 150 full charge cycles will reduce the indicated battery health by 3% - which directly correlates with what you see.
Other factors can influence overall battery health. High ambient temperatures can permanently reduce the battery's ability to retain full charge - as can maintaining the battery at 100% charge for very long periods of time that leads to chemical aging of the battery. Limiting the battery charge to ~80% of maximum is intended to reduce the chemical aging effect.
You should note that the iPad will periodically fully charge the battery - regardless of iPad settings - in order to maintain battery charge calibration.