Even though an aircrafts transponder is always set at 1013.2hPa, errors can still occur by the pilot selecting the wrong QNH. This is because the pilot won't actually be at the altitude he thinks he is.
eg. on a ICAO SA day where a pilot is flying at A050 indicated but has incorrectly set 993 QNH, the aircraft will be at 5,600ft which, provided there are no techical issues, is what the controller will see on the RADAR. This is obviously out of tolerance but can be fixed by setting the correct QNH and descending to A050
PS. I hope my maths are correct