Wrong, the image didn't stretched as you want. Just that what's on top and bottom it's no onger there, it's "displayed outside the screen". This option is somehow similar to a zoom, that stick the left and right edges to the screen and fit the image on top and bottom by not displaying what's more then the screen edge. Similar to 16:9 TV "zoom" function, used to avoid putting black bars on left and right when you are waching a 4:3 image.
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