The variable ZOUT specifies the altitude (in [km]) of a sensor above surface altitude, which may vary between 0 km to to 100 km (satellite sensor, default value). In libRadtran, one or more altitudes may be specified in increasing magnitude (e.g., zout 0 1 2 3 4 5 but this option is not implemented in ALG.
Output altitudes must be within the range defined in the selected atmospheric profile. Note that ZOUT does not restructure the atmosphere model but just controls the length of the target-sensor optical path, which increases/decreases the effects of absorption and scattering caused by gasses and aerosols. Hence, if you specify ZOUT=0.73 and have your atmosphere model go all the way down to sea level, output is presented at 0.730km and calculations performed with an atmosphere between 0.0 and 0.73 km (and above of course). If you want calculations done for e.g. an elevated site you have to restructure the atmosphere model and make sure it stops at the appropriate altitude. This you may either due by editing the atmosphere file or by using GNDALT.
Note that for rte_solver=7 (i.e., polradtran) the atmosphere profile file must contain the altitudes specified by ZOUT.