M wrote:

ATC computer converts the pressure altitude with local altimeter
setting. If ATC knows everyone is using 3100 as their altimeter setting
(can be by regulation in high pressure 31" situation, such as in
Canada), the computer can do similar converson, so the IFR separation
would not be unaffected.

If the pressure gets above the limit IFR flight would not be allowed,
simple as that. That happened 10 or 15 years ago in Alaska. Very rare.