I believe the altitude adjustment on the Onan carburetor works similarly to a choke on a lawn tractor, though not as predominantly. It changes the air-to-fuel ratio. I wonder if it has a partial butterfly valve, as I have never seen it taken apart.
When the altitude is set appropriately, our Onan 4000 Micro-Quiet likes to wander RPMs until warmed up and under load. But we have never had it run a while and then stall unless we ran out of fuel.
It is not supposed to run out of fuel until the main chassis fuel tank reads 1/4 full. But our generator runs out at 1/3.