Not exactly correct, but you have the gist of it. Humidity doesn’t enter into it at all, it’s the change in pressure variation with altitude that MSFS now takes into account that other sims do not. The result, however, is as you described, that an MSFS airplane’s height above mean sea level will be different than a non-MSFS airplane’s height above mean sea level (unless the actual pressure gradient is the same as the standard day pressure gradient).
VATSPY, the VATSIM website, and other 3rd party apps always show the airplane’s height above mean sea level, which is different than the height shown on the airplane’s altimeter unless the QNH is set and either the atmospheric pressure gradient is the same as the standard day pressure gradient, or the airplane is at the location where the QNH was derived.
After all the claims from people that MSFS is more of an arcade game than a simulation, I am not in favor of “dumbing” MSFS down in this respect so that it fits in better with other sims that do not simulate the atmosphere and airplane altimeters correctly.
There is another solution described here for how these other sims can be accommodated by VATSIM and potentially other online flying applications - VATSIM / IVAO / PILOTEDGE Users - Be aware of an important bug! - #363 by BTVPilot