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The max altitude that is set is AGL height. There are no settings for MSL. If you're flying in mountains you are fine as long as the distance from the ground to your drone does not exceed 400' but be warned that plane's flying over mountains might not change their altitude so keep your eyes and ears open. The only way the phantom knows it's height is with the sonic sensors on the bottom. If it was calculating height at Mean Sea Level then it would use an air pressure sensor and it's inner GPS.
Here's another fact 500 m (1640 ft) is 4.1 times greater than the legal height limit.
Just know this if you are flying at great heights just to show off you are experiencing a flight hazard known as mocho and it is the biggest thing that gets repeated in practice tests for registered pilots and they want you to know the antidote ("Taking chances is foolish"). How is flying a drone at heights greater than 400'AGL taking chances is because private plane's and helicopters will fly at those altitudes and the Faa wants manned aircraft to always avoid drones by at least 400'
Here's another fact 500 m (1640 ft) is 4.1 times greater than the legal height limit.
Just know this if you are flying at great heights just to show off you are experiencing a flight hazard known as mocho and it is the biggest thing that gets repeated in practice tests for registered pilots and they want you to know the antidote ("Taking chances is foolish"). How is flying a drone at heights greater than 400'AGL taking chances is because private plane's and helicopters will fly at those altitudes and the Faa wants manned aircraft to always avoid drones by at least 400'