In this clip we can see the hearts above the player, but only within about a 10 block range. Irregardless of if the player has taken damage or not, the players health will always show within this range.
https://s3-us-west-2.amazonaws.com/secure.notion-static.com/f5ad38d0-ddae-4a22-baab-84d23baee2c6/Always_showing_hearts.mov
This option only shows hearts to players when they deal damage to that player. As you can see, when I hit the other player, I could see their health. As I continued to deal damage to them I could still see their health, but following 7 seconds of not dealing damage, their health was hidden again. This does mean there are some cases where you may see another players health, but they may not see yours.
The advantage this option, is that it stops cleaners being able to see if a players health is low, and then taking an easy fight, as it forces them to deal damage to that player. In this option as well, hearts would also be hidden from any more than 10 blocks away, just like the first option.
https://s3-us-west-2.amazonaws.com/secure.notion-static.com/504942fc-7158-493f-84cd-b244f5d51097/Screen_Recording_2020-09-11_at_10.44.58.mov
This is how our system currently works on CubeCraft at the moment, as it doesn't show any health indicators to any vanilla players. If this option was to be selected, any players using mods which display players healths, will be disabled, as to make them no longer give you an unfair advantage.