Sry, just saw this...
I have flown a similar size copter on AQ, with good results on similar altitude_speed settings to yours, so there is something wrong in your setup somewhere. I am gonna assume that your board is properly calibrated according to the instructions in the wiki, but if its not that could be part of the explanation for erratic pos hold... But it does sounds more like a radio problem to me....
Without more details about your Radio setup, craft parameters and
especially a flightlog I can only really guess at what is going on, and the more data you supply to begin with, the easier it gets to help you out.
It sounds like you have your radio endpoints for throttle maxed out or there is some other problem with your radio setup or scaling - that would explain why you have go as low for throttle factor - "normal" values is between 0.5 and 0.6, depending on your throttle ranges. Use the radio tab in QGC Widget to set up throttle for a total range of circa 1400 with center stick at 700
Take a look at Steves method using flightlog to set up throttle:
viewtopic.php?f=27&t=539&start=10#p2735Other causes of erratic position hold behavior is vibration at certain frequencies that can saturate the Z-acc and cause very sudden jumps or drops in altitude estimation. Again, the flightlog is a powerful tool to identify and root out such problems.
Have you covered the pressure sensor in foam and shielded it from sunlight?
Do you have a proper ground plane between antenna and controller?
Are you using fast-update ESC´s (Reflashed or ESC32) If using reflashed Atmel type ESCs without external oscillator, make sure you calibrate them often (or replace them with one that has an external oscillator)... Autoquad needs well-balanced, fast update ESC´s to work properly!
If you have a low range on one or more of your ESC´s, it could also be an explanation for the problems with the throttle factor. The controller does an excellent job of masking up such imbalance up to a certain point.
It puzzles me that you state angle/rate PID is at default, I found that for a similar size frame with TMotor 2208 1100 KV with EPP0845 on 3S with ESC32, I had to more or less cut Rate and Angle D in half, or it would wobble itself to death.