After doing some extensive testing on this, it seems to be healing for however many hearts the Runeblade has.
If the Runeblade has 9 hearts, it will "technically" heal for 9 hearts. This is a full heal, but you can't really notice how absurd it is since you obviously don't have that much HP.
If the Runeblade has 5 hearts, he heals for 5 hearts (again, a full heal).
If the Runeblade has 4 hearts, he will heal 4 hearts. This is where you start noticing the cap. Obviously, this leaves you at 8 hearts, which is a bit lower than a full heal.
If the Runeblade has 1 heart, it will heal for 1 heart. Which is a really weak heal, leaving you only at 2 hearts. (Though I believe this is still above the normal amount.)
Using Runeword for some reason lowers the amount of health that the Runeblade heals for--very odd behavior.
Also, this does not properly carry over to the heromod floating combat text. It still states the normal heal amount above the player's head--despite the large number differences.