While it doesn't happen often, the damage number can be covered by Potion Effects if there's more than 3 effects on the mob in the hud.

P.S.
Could you add a shadow under the red damage number in the hud? Much like how the white numbers & text have a grey shadow under it.

The damaged sections in the health bar empties slowly for mobs that have high health. Would it be possible to increase it's speed? Could have it sync with the the config option set to "Single-Hit".

Great points, thanks for letting me know. I created another issue for the slow animation speed: #6

Adding a shadow is easy and makes sense. I might check to see if the damage number can be moved to the right of the bar without looking strange.

It could work with the number on the side, although the potion effects hud might have to be lowered by a few pixels as it would be a tight fit.