Imo 1 notch per 100 health is a bit low, because champs end up having nearly black and hard-to-read health bars by late game. Perhaps increasing the amount of HP needed to make a notch. Perhaps increasing it to 200 or 300 would lead to a cleaner and more readable HP bar, while remaining the usefulness of having the notches.

200 would be excellent

300 feels like its too high, tho 250 is also an interesting potential (aka 4 bars = 1k hp)

I understand why someone may want this, but I have not experienced it as ever a big issue. One idea that I had was to instead make the notches on the health bar reflect a champion's effective health based on resistances as well as health instead of purely based on health. I feel that this would be a much more effective way to represent stats when making quick decisions in a teamfight.