I will keep this short and sweet.
The “no NPC needs” mod prevents NPCs from needing food and water (If you are not using this mod you can leave now)
However, the mod does not stop nutrition from being an issue.
At -100 nutrition (or “health” as the wiki calls it) healing while sleeping is completely negated.
In short, NPCs hit -100 nutrition then stop healing.
Solution: Just give the NPC a multi-vitamin before resting.
I do not know if this is a bug, an oversight, or an intended feature of the mod “no NPC needs.”