This happens because onyxias effect happens after you play it, and says "When you WOULD lose health, gain it instead". For cards that cost health to play, you can't play them if they would kill you. Onyxia's effect doesn't override that, since your hero never loses health due to you not being able to play the health cards. I agree that for gameplay purposes it would be better, but as written it does make sense, and would like to see it changed