Touched function not working and doing what its supposed to do?

Are you using a local script in the workspace? Local scripts don't run in the workspace and you need to use a normal script.

Also the .Touched event returns the part that got touched like the player's arm or leg so you need to get the parent of that part and see if you are able to get a player from the character first, so your code should something like this:

local Players = game:GetService("Players")
local MarketplaceService = game:GetService("MarketplaceService")
local gamepassId = 16463231

script.parent.Touched:Connect(function(hit)
    local player = Players:GetPlayerFromCharacter(hit.Parent) -- the parent of the touched part is expected to be a character
    if player == nil then
        print("Didn't touch a player")
        return
    end

    -- Your code here
        if MarketplaceService:UserOwnsGamePassAsync(player.UserId, gamepassId) then
            -- Double Coins
            player.leaderstats.Coins.Value = player.leaderstats.Coins.Value + 16
        else
            player.leaderstats.Coins.Value = player.leaderstats.Coins.Value + 8
        end

    player.Character.Humanoid.Health = 0 -- You should use Humanoid.Health not Humanoid.MaxHealth
end)