ALC means Automatic Level Control, as far as I know to ensure that the output power of the ESG is the one you typed, you must have the ALC on.. always..
I don't think that your amplifier is changing it´s gain, I think your generator is diving a different power than the one you think, and therefore, you are seeing that at the output of your amplifier..
I also believe that if you turn the ALC off, then an "unlevel" message appears on the screen noting you that you have problem with your output power... Once, the output power detector of my E4438 had a failure, and in consequence, I had the "unlevel" error and the output power was always different that the one I entered.
Hope to have understood well your problem.
when I use the Agilent E4438 to generate a modulated signal, I find there is a big difference wheather I use ALC or not。
if I put the ALC on, the gain of my amplifier chain is much lower shown on the spectrum than ALC off .
so, who can give my some idea about ALC? thanks alot