In the ARINC specification, why is baro altitude (label 204) measured in Knots?
It's an error. Attachment 2B does show that label 204 from the GNLU (Equip ID 056) and GLU (Equip ID 060) as being in knots (highlighted below). That is not correct, it is a BNR in feet as shown for Air Data System (ID 006) and ADIRU (ID 038). Knots only applies to Label 204 from the FMS (ID 002).  



It's still incorrect in A429 P1-18, March 2012.  

ARINC 429 contact at ARINC Industry Activities, ARINC 429 Maintenance is Jose Godoy. email:jose.godoy@sae-itc.org