I am trying to reproject LAS datasets derived from Pix4D photogrammetry output of a UAV flight that were created with the WGS_1984_UTM_Zone_17N / VCS:WGS_1984 (Z unit is meters above ellipsoid) spatial reference so that it can align with other third-party LAS dataset (traditional lidar; not photogrammetry) in the NAD_1983_StatePlane_Pennsylvania_South_FIPS_3702_Feet / VCS:NAVD88_height_ (Z unit is Ft_US) spatial reference.
The Extract LAS (3D Analyst)—ArcGIS Pro | Documentation, it explains that the LAS data can be reprojected using the Output Coordinate System environment and it is claimed:
'If the spatial reference contains a vertical coordinate system, the LAS files can also be reprojected to another height reference system if the vertical datum transformation grids are installed and a transformation is available from the source reference and the target coordinate system.'
I have the Coordinate System for ArcGIS grids installed and the appropriate transformation is set in the Map/Scene Properties and everything is projected on-the-fly brilliantly in the map and scenes when viewed. The highlighted transformation below is what is selected in the Map/Scene Properties > Transformation for the above coordinate systems.
However, I cannot set the Geographic Transformation environment setting to match the above compound transformation, so I left it blank hoping the software would choose the appropriate XY and Z transformations. However, the Geographic Transformations (Environment setting)—ArcGIS Pro | Documentation says that 'compound transformations' are not valid in the environment setting (which makes me think that this particular transformation is not possible in this tool).
So, when I run the Extract LAS tool, the vertical location of the points are not transformed/reprojected (while the horizontally they are), and instead appear to be located in the original Z coordinate system, which in this case is below the expected vertical location.
So is the claim that the Z coordinate system for LAS data can be reprojected false? Am I missing something? Any guidance would be appreciated. This will likely be mission critical for me. Thanks.