I think one shouldn't mistaken Health with D&D Hitpoints. It's a measure of being able to fight, standing upright and being master of your own decisions. Losing all health points is critical, everything therefore are bleedings, scratches and demoralisations. But that´s thing you could recover from quickly.
The different YZ games do focus this differently. In Coriolis critical hits could be gained regardless of how many health you have. Forbidden Lands combines damage is physical or mental degeneration. Tales ... doesn't know health at all.
That's the wounderful thing about Year Zero. Seemingly small changes tend to have a big impact on how the game feels like.