Yes I know that AGL is measured relative to the COM (Centre Of Mass) of the craft and to the ground, not from the lowest point of the craft (the one that touches the ground).
Though this can be accounted for quite easily by measuring your current AGL and subtracting your current AGL by the offset (the offset is basically the number that AGL displays when your grounded) to get your "true" AGL. Note this method only works when you are directly above the terrain.
The problem starts when you are on a building or construct such as the Luna base launch pad or the main launch pad. Since these pads are not on ground level the AGL gets measured not from the height of the pad but from the terrain underneath it. Effectively the game thinks your floating in the air.
I think a solution to this problem would be to include the buildings as part of the terrain or add a separate measurement that actually gives your actual true AGL which takes into account offsets caused by the buildings and the craft (though it would require the use of the prior solution).
@FalconAero true very true.