If a person who has to go back to Thailand on compassionate grounds, After notifying the Boarder Agency ( To take care of a parent with a terminal health issue.)

would that time be excused when applying for British citizenship, or would it be taken into account.

As you probably know, but for the benefit of those who don't, the usual rule for the spouse of a British citizen is that during the last three years they must not have spent more than 270 days in total out of the UK with no more than 90 days in the final year.

Absences of up to 300 days in total and/or 100 days in the final year are normally disregarded.

However, the amount of time out of the UK, whether in total, the final year or both, can be extended in some circumstances, provided the applicant meets all the other requirements and can demonstrate links with the UK through presence of family, established home and a substantial part of their estate.

However, absences exceeding the limits above may mean an extension of the qualifying period to 4 or 5 years, depending on the total length of the absences; unless the absences were for an acceptable reason; e.g. compassionate.

I cannot say whether or not living in Thailand for an extended period to care for terminally ill parent would be considered an acceptable compassionate reason.

Absences above 540 days in total and/or 180 days in the final year are very unlikely to be acceptable.

For more detail see Section 5 of Naturalisation Booklet – The Requirements.