What counts as low health for Killing Blow?
Solution 1:
I initially guessed 50% health was considered "low health." If you were to melee attack light enemies (i.e., non-heavy enemies like most Bullymongs) at 50%, it would cause them to stagger. Though after experimenting, this doesn't seem to be the case.
Based on my observations, I'd say "low health" is ~33% health (or 1/3 health).
Fortunately, it is pretty clear when the ability was applied in a kill. Normally you deal a fixed amount of damage to everyone. When the ability is applied, you see a boost in the damage dealt and you get a nice "buzz" sound and a slashing animation for every hit.
To test this, I respec'ed Zero and went off to fight making sure I didn't level up any more during the tests. As a baseline, I fought off enemies with only the Deception skill and no other skills. Every melee attack I dealt gave 55 damage.
I saved and restarted to go on another run. This time I added Killing Blow Level 1 to the mix. Again, most hits dealt 55 damage. Using a weak gun, I chipped enemies' health to around 50% (as close as I can get it) and hit them with a melee attacks. Still did 55 damage. I then tried for 25%. Again, as best as I can, I chipped them down to as close as I can to 25% then hit them with a melee attack. I got boosted damage and other indicators of a successful hit. So it's definitely applied at least at 25%.
However I noticed that at times when I wasn't quite at 25% but a little higher, I was still able to get the successful hit. So apparently it was higher. After a few more tests, I came to the conclusion that it is at 33% at max.
To see if the level of the skill affects this, I tried again with Killing Blow Level 2 and up. You get even more damage of course but it still seemed to apply at 33% and didn't change.
Solution 2:
User Zikel, in the /r/Borderlands subreddit tested Killing Blow and came up with the ff. results:
When exactly is an enemy "low on health" ?
When below 30% health.
The damage bonus from this skill is multiplicative rather than additive, that is why you get astronomical numbers when using it.
Source: Reddit /r/Borderlands post by user Zikel, "Many skill descriptions are misleading, don't tell the full story or straight up lie to you. I took it upon my self to test EVERYTHING and clear up the confusion. Here are the results."