Mario does not gain extra health if he is already affected by a Life Mushroom. Upon grabbing a second one, his health will restore to 6. If Mario grabs a Life-Up Heart while he has 6 health points, it will give him coins instead.
They are usually found before boss battles, or in challenging levels. They are also sold in the Crazy Cap stores, will sell Mario a Life-Up Heart for fifty regular Coins, and won from slot minigames. One can be found inside a ? Block in the Metro Kingdom, before the Mecha Wiggler's boss fight.
A Life-up Heart can also be obtained in the Darker Side either by defeating the Yoofoe at the start of the caverns or correctly answering the sphinx's question: which kingdom has he NOT been to yet (the answer is the Mushroom Kingdom)