Yes I agree about usage of the rangefinder as the primary altitude source is not recommended for normal flights.
I generally start tests in stabilize , doing the usual trim and PID land, check the logs, confirm rangefinder reading and stability and then use it as primary source.
Start in stabilize, takeoff and then switch to alt hold, check for stability and response. Land and takeoff in alt hold mode to confirm.
As for loiter, set ekf home , hold quad a simulate a flight , confirm that vehicle movements ate showned on map. Takeoff in AltHold , make sure vehicle is stable and switch to Loiter, get ready to switch back.
Last test I did is takeoff in guided an did different guided “fly to” and land.
