What does the altimeter indicate if it's at a certain elevation
An altimeter is just an adjustable barometer with extra hands.

There is a barometric correction you dial in so that the altitude shown is always feet above sea level.  The correction is from the current barometric pressure reference you get with the "altimeter setting" or the weather report.  

You dial in the altimeter setting, the current barometric pressure reference for your location, and shows your true height above sea level.  In your example, if the altimeter setting is correct, it will show 10 ft above 0 ft.

Or, you can work it the other way.  If you know the elevation you are at, you can dial the altimeter so its altitude indication matches your known elevation.  Voila!; the current barometric pressure is shown in the setting window on the instrument's face.