Yep, the transponder outputs (references) 1013.25mb/29.92 inches, regardless of the individual altimeter Kollsman window setting.
Twist away, makes no difference.
Now, it's not always been this way.
When mode Charlie was first introduced in the USA ( a very long time ago), some altimeters had encoders contained within (not to be confused with present day encoding altimeters), and the reference was to the altimeter setting.
Remember 64 code transponders with mode C?
Yep, that's the time.
This was changed PDQ when it was realised the problems that it might cause.
Having said this, as the transistion layer in the USA is quite high, it made no practical difference, but was changed nevertheless.