Upon further testing, i am now 100% sure that the increase in mob regen is tied to out-of-combat indicator. While mobs, regardless of level, normally regen 4% or so per tick, making it difficult to out-damage them, a single negative spell will remove that regen. Malo, any DoT, etc. So easy enough to work around, assuming you are a class or a 2-box that's capable of debuffing.
Tested on a Crazed Goblin in Highkeep, who was red to my 26 Paladin at the time. Could barely keep up with regen until my Shaman landed a Malo, then the mob's HP started shredding.