hunters machete: 'Gain 6 health and 3 mana per second while in combat with monsters'.
'The amount of health gained per second increases to 12 while below 50% health'.
The second part doesn't activate while fighting dragon (passive works as intended with every other non-cowardly monster, including baron).
tested with pantheon, soraka (don't ask) and blitzcrank.
having trouble uploading screenshots but will keep trying.
EDIT: imgur links
1: take smite into custom game and buy hunters machete
2: observe machete passive working perfectly against normal jungle camps
3: fight dragon and die because the passive (+12 health per second) doesn't activate when below 50% health vs dragon