For example, one aircraft operating at 11,000 ft on 994 hpa and opposite direction traffic at FL100 on 1013 hpa. I think I have that the right way around.
Alas not .... 11,000 on 994 = 11,570 on 1013. And 10,000 on 1013 = 9,430 on 994.
Ergo, no separation problem
Also causes problems when the aircraft is on climb through an altitude but has been cleared to a FL and you are trying to verify Mode C.
The 'altitude' will always be recieved as a Flight Level. Some ATC systems will then convert this to an 'altitude' based on the QNH which has been set in the radar processing system.
At our ATC Centre, we are provided with a simple conversion factor on the sector briefing screens which we can then apply to either a displayed Flight Level or displayed Altitude if the pilot reports on the wrong datum. Our datum is always applied to a displayed Flight Level to give the altitude. Thus +3 Conversion Factor means we add 300' to the Flight Level value and we have the true 'altitude'. If we wanted the Flight Level value of an aircraft displaying an altitude then we would reverse the value, namely subtract 300' (or -3 Conversion Factor). It's not rocket science and everyone copes with making the calculation (if required) in a millisecond.
The UK altimeter setting rules are relatively simple. Cleared to a Flight Level, set Standard. Cleared to an altitude, set QNH. If ATC then have to stop you off at an intermediate level using the opposite datum, then it's up to them to ensure that the pilot has the correct datum reset.