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.
That said, all the Airbus types (except the A380) and the Fokker 70/100 suffer from a bug which means that the last used QNH value is sent as the BPS even above the TA, instead of 1013.2.
Presumably fixing this isn't considered a high priority as the BPS value being sent is irrelevant when flying at a FL.