I’ve had the same issue when I fly with live weather turned on using an Xbox Series S. I don’t get any updated altimeter readings when ATC says I’m above or below my assigned altitude, so I turn the live weather off and adjust the altimeter to the standard settings. I don’t hear from ATC about altitude after that. I thought that if you are flying above or below an assigned altitude, ATC would update you on the altimeter readings when contacting you, but I guess there is a bug in the software.