or maybe he had the wrong altimeter setting which corrected itself when he contacted the controller and received and set the correct barometric pressure.
or maybe he had a Special Flight Permit.
Was he operating carelessly or recklessly? then maybe I would call.
Maybe it failed in flight and he was flying to a destination to get it repaired. He was not operating IFR and did not have to report it. If it were me flying and my Altimeter failed, you bet I'd report it to get it on record that it just failed in flight. That way if I land and the local FAA dude pulls up to meet me and asks why i was flying with busted Altimeter, I can tell him it failed in flight, to listen to the tapes of when it was reported and that I'm here to get it fixed.