scaling down

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The And operator in Blitz3D is actually bitwise.

The expression ( health >= 2 ) evaluates to 1 or 0, meaning True or False respectively.

The expression EntityCollided (sphere, type_cube) is simply an integer, the sphere's handle. As it happens this is always an even number. So when you combine them with

EntityCollided (sphere, type_cube) And health=>2

the result is 0. Thus your collision code is never executed. Change the test to

If EntityCollided (sphere, type_cube) <> 0 And health => 2 Then