90% is pretty degraded for a battery (if the battery health metrics work the same way as Androids do). By 80% it's usually almost completely unusable, in my experience

Though I agree that battery health hasn't been super important to performance. But resetting the phone can do wonders

These mobile processors are very aggressive in lowering power demand when there is little computational load. Then, when you open an app or give it anything to do at all, power consumption jumps by orders of magnitude.

An aged battery will show big voltage drops under load. What was looking like a fine and dandy voltage (voltage is used to infer state of charge) can suddenly plummet. It can get so bad that your phone might even shut down because it starts to undervolt.

So, choosing between the lesser of two evils, iOS throttles down max. power draw, and thus max. processing speed, when the battery ages. The alternative would be random shutdowns, or your battery jumping from 80 to 8% suddenly.

In settings -> battery -> health & charging you can check in which regime you are.

As a battery ages it's capacity decreases. That's noticeable in that it will carry a load for less time, and the voltage it can sustain decreases.

On most phones you realize that when an old phone goes from 15%, you do something CPU intensive and the phone dies seconds later.

So it's reasonable to lower the peak power use on older batteries to lengthen battery life and make it more stable. Generally battery life increases when you are gentle. Charge slowly (which results in lower temps), avoid charging over 90% or discharging below 10%, and decrease the peak loads.

I don't know if it's still the case but on my old iPhone 6s, the geekbench score would differ depending on how full the battery is. Apparently Apple was pushing these processors on the limits of what the battery can deliver and once the battery degraded they need to lower the CPU/GPU speeds to prevent the device shutting off suddenly.

It even turned into a huge scandal of "Apple deliberately slowing down old iPhones" which was portrayed as if Apple is doing it to make you buy a new iPhone.

When the batteries get older, iOS throttles performance to ensure the device doesn't shut down unexpectedly. https://support.apple.com/en-us/HT208387

Once batteries get really old, I think they can start having trouble maintaining voltage and/or current, and Apple will start limiting performance to reduce fire risk. At least that's my understanding. Hopefully someone who knows more will also chime in.

It’s not perceived but actually worse. iOS reduces speed to improve battery-life

That was only the case for a particular device afaik, that would otherwise just randomly reboot during usage (much worse then degraded performance).