I have found the same thing; activating infinite ship health just sets the health of all ships to 99, which is a problem when some of the shops are Large or Huge ships with 100s of hitpoints...
And that is all that "infinite ship health" does... Smaller weak ships last longer as they have a bit more health, but bigger ships die much more quickly because they have lost all but 99 health.
To see what we mean try playing the Arcea campaign; when you activate the infinite ship health mode, watch the health of the Crusader drop to 99... And watch your ships die in combat.
I think you are mistaken. Most probably you have deactivated the option and that is why your ships die. I have personally tried it and the flagship never dies. Nor the rest of the ships I have. I do have an issue with the last patch, which seems to have disabled the money part of the trainer. I have like 2000 and trying to add 5000 and it does not work.
I _*am*_ not mistaken.
I tested it out multiple times before writing this up.
Any time I turn on infinite ship health all ships in the fleet are set to have 99 health, regards of what their health was previously, e.g. a Huge ship, such as the Crusader in the Arcea campaign, with 600 hitpoints will drop to having 99 hit points.
And if I then attack, with the option enabled, the health of ships in the fleet will drop, and ships will be destroyed.
How I reproduced this:
1) Start the Trainer
2) Start GC3 on Steam (updated latest 1.32 version)
3) At main menu hit F1
4) Select Campaign
5) Select Arcea
6) Start campaign
7) Enable infinite ship health
8) Check health of ships in fleet - see that it has dropped to 99 for any ship I check
9) Attack first small Dregnin fleet right in front of me and watch the battle - some ships start with significant amounts of red in their images, and while the heal during the fight, they still take damage from the enemy weapons
10) Attack the main Dregnin fleet - watch some of your ships die.
I'm running Win 7 Ultimate x64 BTW.
If you can run through the above reproducer scenario and demonstrate that infinite ship health is working as you say it is, then you can tell me I'm mistaken, but I suspect you will see the same problem that I and Mael have reported.