FCOM
Unfortunately, it does not have to do with "over/under shooting the desired FCU alt", according to the FCOM:
"The ALT* and ALT CST* modes have internal V/S guidance that is a direct function of the difference between present altitude and the altitude target. The system switches automatically to ALT (altitude hold) when the altitude deviation becomes less than 20 ft." Taken from Autoflight, Flight Guidance, AP/FD Vertical Modes, Alt Acquire Mode.
Therefore, pushing V/S to level off, would command a level off (V/S 0) at the present altitude, instead of actually capturing the FCU ALT Target. On the other hand, selecting a V/S, eg: 100ft/min would only revert the vertical guidance to V/S + 100, which wouldn't capture the FCU altitude either.
Hope I'm not mistaken.