It can do a health check, just requires 1 or 2 full discharge/recharge cycles.
It measures current consumed during the charges and compares that to the battery specs.
Over the years I’ve found it pretty accurate. I keep multiple phones of the same type with the exact same OS/app build out, and can see the difference in battery health between old/new, and see it reflected in battery life when using either one.
I keep phones forever, and run AB on them once or twice a year, and it consistently shows their health dropping. I lose about 7-10% health per year, and that’s reflected in reduced battery life during a day.
One phone is down to about 40%, and even with Lineage you can tell. It can run for a couple hours before needing a charge, while the 83% health phone goes most of a day. Again, same hardware, same OS, same apps, same usage.