I thank you for showing such interest in this next update, Rafael, and wanting to help by reporting bugs that most likely don't exist, but your making things harder than they should be for me lol. Not trying to sound mean, I appreciate your intent.
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Annnnyways, I've found out what the issue is with the life 3 not working for the monsters - if both the life 3 flag AND the 'is undead' flag are checked, this issue will happen. It does the same in vanilla, although no monsters come with life 3 flag on them of course, so it's not a problem. I at one point already knew about this bug and unchecked the is undead monsters that have the life 3 flag set as well as being undead, for instance that Undying bone guy, who obviously should be undead. So for 1.7, I forgot all about this, and I was like why the hell isn't that monster have the undead flag, and set it...and did it for a few monsters.
So, I'll either just remove the undead flag again and problem solved, or ask Madsiur about a possible fix to allow it to still work with both flags checked.