Mesoman
As you say, there is an additional constant related to the delay in that type of AES (and probably other constants) that cannot be disentangled from the VT virtual altitude with the data available. I don't think a height of zero would be chosen because:
a. it would give negative BTO value for a flight overflying 64.5E,0N
b. they didn't want to log negative numbers even with noise, so applied an offset
They really are just removing an offset, but that offset includes the variable ground station to satellite distance. The explanation does stack up with the graph of satellite elevations that was shown at a briefing, so it must be close.