Baro pressure changing at FL350?

[Flagstaff Flyer]

Wondering if this is a FS2004 problem. I noticed at cruise altitude with altimeter set to 29.92 that the pressure below 18k must be
effecting the altimeter because it will jump up and down a few hunded feet causing the autopilot to compensate. Also, you would think
that at that altitude the altimeter should match the elevation FS thinks you are at (Shift-Z). It can be off 500 feet!
Default 737

[Dutch64]

The altimeter settings in fs are buggy but another reason might be that you have VAS enabled in ASV (If you have ASV )

[SWAFO]

This, and it's relation to ATC was discussed a few days ago. A search would be helpful!