the battery health has decreased relatively quickly in a short period.
Battery decline is not constant or linear. The battery might decline very slowly for a few months, then drop 2-3% the next month. Nothing to be concerned about.
the battery health dropped from around 98% to 93% within the last 1–2 months, which feels quite fast.
On the surface, most people would look at this and see a 5% decline. But....Apple does not display tenths of a percent and they always round the numbers down.
So, the battery might have been at 98.1% and it declined to 93.9%.....a drop of 4.2%.
Apple's support documents on the battery state that the battery in the 16 Pro Max was designed to go up to 1,000 Charge Cycles under ideal conditions. Yet "ideal conditions" are not really well defined, so it's difficult to interpret what "normal" might mean.
That 1,000 Charge Cycle number works out to about a 1% decline for every 50 Charge Cycles before the battery reaches a Maximum Capacity of 80%.
So, your battery has completed 282 Charge Cycles. So 280 divided by 50 = 5.6%. Call this roughly 5-6%. So, 100% Maximum Capacity less 5-6% = 94-95%.
I would be very happy with this type of performance. If you want to take the iPhone in to the Genius Bar to have the battery tested, I think that they will confirm that the battery is doing very well.
Apple does recommend that you use Optimized Battery Charging in their support documentation for the best chance at long battery life, so you should use that setting on your iPhone. Connect the iPhone to the power supply at night and leave it connected all night.....every night.
About Charge Limit and Optimized Battery Charging on iPhone - Apple Support
My opinion.....Charge Limits are more of a gimmick than anything else, but that might be another discussion.
Don't try to babysit the battery. It won't help, and it will just make you anxious if you are checking the battery all the time. All that you really need to remember is to replace the battery when it drops below 80% Maximum Capacity.