Why doesn't this health regeneration script work?

First off, there is an event named HealthChanged, which would be more wise to use. Next, this is a local script (or else would not work in with game.Players.LocalPlayer) -- changing properties in a local script will only work in studio if your game is Fe. There are two ways to go about this. If ALL players have this regeneration, then a server script would work better;

game.Players.PlayerAdded:Connect(function(Plr)
	Plr.CharacterAdded:Connect(function(Char)
		Char.Humanoid.HealthChanged:Connect(function()
			if Char.Humanoid.Health <= 25 then
				regenerate() -- Make sure to define this function somewhere (I'm assuming you already have)
			end
		end)
	end)
end)

On the other hand, if you need only certain players to have this ability, and it is detected through a local script with no efficient way to do it with a server script, you can use a remote event. Simply add a remote event to ReplicatedStorage, and define it in the local script.

remote:FireServer()

Then, a server script within ServerScriptStorage:

remote.OnServerEvent:Connect(function(Player)
	if Player.Character.Humanoid.Health <= 25 then -- add in any other ways to make sure the player didn't exploit to call this remote event
		regenerate() -- Again, define this somewhere.
	end
end)

I hope I helped, and have a good one!