Following is a response from DHS Research & Data Analysis Director, Tom Pullum:
When using hw70 (or the other anthropometric variables) you need to be sure to omit the flagged values such as 9996. Also you could just reduce to whether the child is stunted. This would seem to discard a lot of information but actually it's the left tail of hw70 that indicates malnutrition. Here are the Stata lines to do that:
gen HAZ=hw70/100 if hw70<-600 & hw70<600
gen stunted=0 if HAZ<.
replace stunted=1 if HAZ<-2