All that note means is that the new default state when the transponder is powered on is "ON", instead of standby, as I believe it was before. This is how most transponders in the United States are programmed, after the FAA's guidance changed some number of years ago to recommend conducting ground operations with the transponder activated. I forget who recommended that change in the Baron specifically, but I recall making the change so that the startup state would be consistent across all my aircraft. As for why yours boots into altitude reporting mode, I'm not sure, because I just checked the code, and it's definitely set to "on". If you want to check this on your end, make your own changes, or revert to how the aircraft behaved previously, you can located the "apron.flt" flight configuration file for the Baron and edit the line that reads, "TransponderState=2". 0=Off, 1=STBY, 2=ON, 3=ALT. I hope that answers some of your questions.