Should I update my iPhone 7 Plus to IOS 11.3?

Basically, I'm interested in the iPhone Battery Health feature, but I don't want my iPhone to become slower, drain battery quickly or any other bad reaction.

I would hold off on it. It's a beta test so I don't think it's that accurate.

My old iPhone 5s says the maximum capacity is 86%, which is better than my iPhone 7 Plus (83%) which is not true because the 5s dies after several about 4-5 hours of use.

I think apple will release a better version after this year. I think apple bumped the health percentage up to discourage people from using the discounted price to get a new battery.

The update won't make your battery any worse or slow down your phone. The only way your battery will get worse is if you disable the throttling in the settings. If you don't touch that then it won't be any different