This looks like a classic Layering case.
Make sure you specify the ideal cell height for each layer in the Meshing Options tab from the Dynamic Mesh Zones dialog box.
Layering will split layers that are 1.4 times this ideal height and collapse those that are 0.2. The default is height is 0, which means to remeshing for the layer, which I suspect is why you're seeing the stretching you are showing.Â
You are navigating away from the AIS Discovery experience