This is how that rune works. During battle, a unit can restore 40% of its health permanently. (until it is killed again)
If it were that easy... no, there's a small clarification: it restores 40% of the UNITS KILLED in battle (for example, if you have 10 units in a unit and 3 are killed, it will restore 0-1 unit... but if it were 40% of the entire unit, then it would be overpowered).