This is the description of the AltBus block function:
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The AltBus block modifies the bus format of a DSP Builder signal. Only use this block as an internal node in a system, not as an input to or output from the system. If the specified bit width is wider than the input bit width, the bus is sign extended to fit. If it is smaller than the input bit width, you can specify to either truncate or saturate the excess bits.
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In your case the following will happen
input to AltBus:
-32 (10 bit signed decimal) = 11 1110 0000 (binary) = 0x3E0 (hexadecimal)
after AltBus with reduction to 8 bit unsigned:
224 (8 bit unsigned) = 1110 000 (binary) = 0xE0 (hexadecimal)
I think for your problem you need to check if your input is negative and set the output in this case to 0.
Additionally check if a positive input is bigger then (2^8 - 1 = 255). Depending on your application saturate or truncate the MSB in this case.