I would really love to see health in millions / billions where it makes sense.

I think 3 digits for everything might be best. For example:
550 - 550
1550 - 1.55 K
15,550 - 15.5 K
155,000 - 155 K
1,550,000 - 1.55 M
15,500,000 - 15.5 M
155,000,000 - 155 M
1,550,000,000 - 1.55 B

Probably didn't need to write all that out, but you get the idea.

Everything is getting severely squashed in BfA, I query how much of this will be needed.

Well, boss health is still in the millions. Regardless of whether or not shortening billions is needed, I don't think everything should be expressed in thousands (or there should at least be the option).

I was looking to implement this myself and submit a PR, but I actually can't seem to find where those health numbers are defined. If I could be pointed in the right direction I'll give it a shot.

Considering how much Blizzard has changed with 8.0 I'm currently unsure either but will go digging.