I say this as someone who's pretty invested in the Apple ecosystem, however...
This is such disingenuous bulls**t. If customer safety was their first concern their prices would be the same or less than 3rd party repairers (assuming genuine parts are used), not higher. By all means disable the health feature with a neutral message like, "Health feature disabled. Please use a genuine Apple battery to access this feature." But scaring people with a, "service required" message, even if a genuine Apple battery is used, is totally out of line here and a pretty transparent attempt at gaining extra business.