Placebo healing

The only big issue I see is that it is attached to Prestidigitation. As is,or RAW, the spell directly affects things, and creates actual items without any sort of illusion component ties to it. Also, Prestidigitation last for an hour which would essentially afford the wizard up to 600d4 worth of healing, or that many people with buffs. Obviously that is the second most extreme case, but playing with those possibilities is important to see how the idea could potentially be abused, and it could be no ill will of the player with the idea, but another at the table realizing the potential. Side note: the most extreme is that the wizard could just cast it again at the end of the hour, and continue to do so every hour.

I write all of that and realize that maybe the player, and you meant that they want to cast Minor Illusion instead of Prestidigitation? Granted a lot of the issues I have remain because it is a cantrip and can essentially be cast every minute until the wizard passes out. You would need some other limiting factor than the deception v insight. Maybe its that if used on a creature it can't be used again until a long or short rest kind of thing. Or there could be a certain number of times they can attempt to use the spell in that way. Hope this info helps.

I can see that being handy for morale bonuses. If an ally misses, he can cast a spell on both of em saying "look! He's bleeding! U must've knicked him! Press the attack!". Or making an illusion of an enemy's symbol on their armor. It'll let him be creative and encourage role playing from everyone, as more character story would give him insight into how to cast his spells.

The unfortunate part is that there's a chance it'll break immersion for other characters. If they know he's lying, they won't see his character, they'll see the player trying to get bonuses or deceive them. They'll have to question what they're hearing in game.