Gary,
An interesting one.
At first glance, I agree with Ian - and a check to ensure your colleague has the correct ICAO Hex for their aircraft in both PAW/Rosetta and Transponder would be my first ‘Go to’. I have seen several cases of a finger-induced error here - often involving two figures being typed in the wrong order. Very easy to do so check carefully.
The fact that you say both aircraft symbols are showing the same ‘Callsign’ (by which I presume you mean ‘Aircraft Reg’) is, however, confusing me - as the Aircraft Reg is normally determined by PilotAware by looking up the received ‘Hex’ in an embedded table. The same ‘Aircraft Reg’, would therefore imply that both PAW and Transponder are transmitting the same Hex - which should result in one ‘aircraft’ being automatically filtered out by PilotAware. This effect could however perhaps still be explained if the aircraft Reg was in your colleague’s PAW Hex ID box instead of the ICAO Hex ID box. If in any doubt, can you please take and post a screen grab of their ‘Configure’ Screen.
The altitude difference BTW is easily explained due to allowable variation between the two transmitting devices, though you would of course normally only ever see one.
Let us know what you find.
Best Regards
Peter