as far as I understand the logic, the elevation recorded for the target point is the waypoint passage elevation for your flying waypoint in the editor.
Ex : gruond elevation is sea level (0 fts).
You put a waypoint in the editor. Default altitude is 6.000ish feet, or 2.000 meters.
In the hornet, the waypoint altitude is 2.000 meters, and your TGP will search an invisible point at 2.000 mrs in the air, above your target.
Correction :
In the hornet, select your waypoint.
On the HSI, select Data, then UFC.
Change Elev point to the Target Altitude.
And your TGP will slave correctly.