first do a reset fitness calibration data in the watch app on the phone before leaving it to go for a walk/run.
sustain for at least 20 min.
Everytime you have a barometric altimeter, it's all down to the algorithms to get it right. Garmin has the same issues.
IMHO the two should be held separately as there's no device that i know of that gets it right in a constant way for long periods of time (days, weeks, etc.) without constant calibration. For example, Garmin's auto calibration does not work properly, meaning you have to daily manually calibrate your altimeter, which is WTF...otherwise your floor count will slowly go to hell, altimeter obviously too.
Since AW does not have built-in maps, i think it geolocates you in 2D using GPS and using the BT connection to the phone it tries to give you the elevation at your 2D point in space. So for accurate elevation, iPhone is needed. Now the algorithms come into play: sudden barometric changes (air pressure) mean either you're moving vertically (climbing/descending) or you're using a high power air dryer, or sticking your hand out of the window of a moving car, or stepping into an elevator, or, or or.....let the device figure it out by itself wtf happens.
If you're climbing a pole, you 2D point in space remains fixed but your altitude increases. How do you measure that? Only using small pressure changes due to height differences.
Again, Imho the algorithms behind the barometric altimeter are the source of all ****ups.