Falstaff is thought to show cowardice on the battlefield by pretending to be dead so that he can avoid being killed by Douglas. To make matters worse, when Falstaff gets up from his feigned death and sees the dead Hotspur, he stabs him in the thigh and pretends he killed him.
In a soliloquy on the eve of battle, after a stirring speech by the king and a goodbye from Prince Hal, Falstaff offers his opinion on honor. He says,
Can honor set to a leg? no. Or an arm? no. Or take away the grief of a wound? No. Honor hath no skill in surgery, then? No. What is honor? A word.
To Falstaff, honor is a meaningless concept. He is a partying pragmatist who loves food, drink, women, and a good time. He sees no reason to risk his life in battle. For him, feigning death is not cowardice. Instead, it represents living wisely.
Prince Hal exists as the golden mean between the excesses of both Hotspur and Falstaff. Hotspur is too rigid and judgmental. He is overly wedded to ideals of courage and honor. His obsession with honor leads him to make rash and destructive decisions, such as entering into battle with King Henry. Falstaff, on the other hand, is too quick to save his own hide at the expense of others. Hal falls in the middle, showing great courage but wisdom and caution, too.