Fox3snapshot:
You said:
We do see your altitudes jump up and down on the radar when wrong QNH is set on your altimeter and the QNH is subsequently changed, thats why we challenge the levels for separation.
I think what you are seeing is the aircraft being flown to the correct level after the altimeter setting gets changed. I can't imagine the crew correcting the altimeter setting but then remaining at the original incorrect altitude/FL with all the cockpit indications now showing them off their assigned level.
Have a look at
AvWeb - Transponder Basics under the heading Altitude reporting (it's a long way down the page).
.....your transponder transmits your aircraft's PRESSURE ALTITUDE (rounded off to the nearest 100 feet) whenever it receives a Mode C interrogation and is switched to ALT mode. <snip> Because the transponder reports pressure altitude, the altimeter setting that you dial into your altimeter's Kollsman window has absolutely no effect on your Mode C altitude reports
I can see from your point of view you give a QNH change and see a change in altitude readout. However, I contend that it is not a direct cause and effect and a few other factors get into the act.
[PS. I always looked forward to entering your airspace when in your part of the world. A bit like coming home!]
Maasalaama.
DD