AN ACR MLG OVERSHOT ITS ALT ON CLBOUT.

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WE WERE CLRED TO CLB TO 10000 FT AND TO TURN R TO A 180 DEG HDG. THE AUTOPLT WAS ENGAGED. WE WERE CLBING IN THE TURN AS I BEGAN TO RESET MY ALTIMETER PER COMPANY PROC. ATC CALLED TFC AT 12 O'CLOCK AT 11000 FT. I STOPPED RESETTING THE ALTIMETER TO SPOT THE TFC. AT 9000 FT (MSL) I ENGAGED THE VERT SPD FUNCTION OF THE AUTOPLT AT PLUS 1000 FPM. AS THE ACFT NEARED 10000 FT; THE FMA ANNUNCIATED ALT CAPTURE AND ALT HOLD. I THEN RETURNED MY ATTN TO RESETTING MY ALTIMETER. JUST THEN; THE CAPT CALLED 'THERE'S YOUR ALT!' EVEN THOUGH 'ALT HOLD' WAS ANNUNCIATED ON THE FMA; THE ACFT CONTINUED TO CLB THROUGH 10000 FT. I IMMEDIATELY PRESSED THE ALT HOLD BUTTON HOPING TO STOP THE CLB. THE ACFT CONTINUED TO CLB; SO I DISCONNECTED THE AUTOPLT. THE ACFT CLBED APPROX 300 FT ABOVE OUR ASSIGNED ALT. AT THE FIRST SIGN OF AUTOPLT MALFUNCTION; I SHOULD HAVE DISCONNECTED THE AUTOPLT AND MANUALLY BROUGHT THE ACFT BACK TO THE DESIRED FLT PATH. ENGAGING THE 'ALT HOLD' FUNCTION A SECOND TIME IN ATTEMPTING TO 'FIX' THE PROB WASTED VALUABLE TIME AND CAUSED A GREATER ALTDEV. SUPPLEMENTAL INFO FROM ACN 262750: THE FGS/AUTOPLT APCHS LEVEL-OFF ALTS (IN CLB AND DSCNT) AT A MUCH HIGHER RATE THAN WE DO WHEN WE FLY BY HAND. WHEN IT DOESN'T CAPTURE AND WE RECOGNIZE THIS THERE IS AN EXCELLENT CHANCE FOR AN ALT OVERSHOOT. PERHAPS I COULD HAVE TAKEN OVER THE ACFT AND STARTED THE PUSHOVER; BUT I DON'T THINK I COULD HAVE DONE IT MUCH MORE QUICKLY THAN THE FO WITHOUT RISK TO THE FLT ATTENDANTS UP IN THE BACK.