The Barometric Pressure Setting (BPS) on the aircraft is downlinked to the ground in the Comm-B date regiser (BDS 4,0) as Selected Flight Level / Selected Altitude. It is purely a reading from the baro setting, the transponder is unable to validate whether the value entered is correct for the airspace or level being flown.
It requires a software tool within or attached to the radar data processing at the ATC Centre or Tower to take that information and compare it to what BPS setting should be, i.e above transition should be 1013, below transition should be a QNH. The automated system would do the comparison and alert accordingly.
All level 2 and above Mode S transponders (i.e any sold in or operated in Europe) are capable of delivering the BDS 4,0 register if requested by a ground surveillance system - whether it has an appropriate interface or the aircraft can provide that information is a different matter.
RS