There is a genuine risk here, so I can understand why insurance companies are hedging their coverage. If you live at sea level (so most of Europe) then even Denver (1600 metres) can be problematic for a minority. One factor is that we know that Covid-19 damaged a lot of lungs, and that's the first problem in assessing the risk of cardiac and pulmonary crises. I've been to La Paz (3600 metres) about 6 times, and I live at 300 metres above sea level with good spirometry results, and yet each time it lays me out flat 48 hours. And that's not true altitude sickness, which is pretty horrific as these things go. As you get older the risk increases, and hence insurers get twitchy. 2,500 metres is the general risk level used by the NHS in this area. Now some people will be experienced in this and with good levels of fitness, which is fine until a tummy bug strikes and hydration become difficult to maintain. Vertigo is more a middle ear issue, distinct from altitude sickness.

The other thing I take out of this is alluded to by the OP. BA have two sets of medical policies in this area, one for flights that have not started, and another for mid-flight sickness, and as moral_low_ground pointed out, that would have helped enormously had it been a return BA ticket - the policy is designed to help those in this situation but assumes that the traveller is on a return ticket. Having two sets of single tickets as well as some complexities as to ticketing instruments - well that's the bread and butter of this forum, so one can totally understand why they did this. But there is a salutatory lesson here that buying a return ticket may well be more expensive, until the alternative goes haywire - suddenly that expensive ticket becomes worth every penny. Something worth reflecting upon.