Maybe I was lucky and got the Altitude Hold (AH) worked the very first time. After I have the V2.5.5 firmware installed and fixed my latest crash, my AH no longer work. Once I switch to AH mode, the heli immediately slammed onto the ground with negative collective pitch. It happened once way before V2.5.4 and I thought it was an isolated incident. Luckily I already have a very strong 500 landing skid mod on this 450 and a set of plastic golf balls as landing cushion, there was no damage.
Anyway, so I played around with the PIDs and noticed that it had no effect at all. Finally it dawned on me that it could be the trim. So I went to the Heli Setup, Swash Travel, and changed the Collective Zero to a higher number! Voilà! It hovered and AH!
So, in case your heli jump to way high or slam onto the ground when switching to AH, change your collective pitch zero setting in the Heli Setup page.