To get back to the question -
What causes fuel flow to decrease with altitude for a given torque setting in a turboshaft powered helicopter?
At a given torque setting on a free shaft engine, the Ng (or whichever particular term is used) will increase with altitude and the engine will be operating at closer to its optimum design with respect to SFC. Most FCU's these days account for fuel SG and the FCU deals with Wf (Weight of Fuel)
Check out the info here -
RR Allison C30 for an example.
As you can see the SFC (lbs/shp/hr)varies from 60% Cruise 0.719 to 0.588 at OEI 2.5 minute. This pretty much average for most turbines that are out there. TM's, RRA's, PWC's etc. A GE CT7/T700 has an SFC down in the 0.450's or so. 30-40% better SFC does make a difference.