Great news! I found where is the problem.
The issue is caused by wrong default aspect ratios in the GUI configuration file (guisettings.xml). The file is located in /storage/.kodi/userdata/ directory (also is accessible through the samba share "Userdata"). All resolutions and refresh rates are described separately in the file, so the aspect ratios can be configured differently. By default, [email protected] mode has correct value, but others not. That's why we have black bars on the videos and the image is squeezed horizontally.
To correct this, you have to edit the aspect ratio values in the guisettings.xml file for all required resolutions. I changed only 1920x1080 modes as I'm using only them.
For example, for [email protected] mode, default aspect ratio was 1.009191, which is wrong:
<description>HDMI1: 1920x1080 @ 23.98Hz</description>
You have to change this value to: 1.000000 for all standard square-pixel resolutions and refresh rates (for example 1920x1080, 1280x720).
Seems that you need to stop the Kodi before modifying the file, otherwise it will revert back on restart:
1. stop the Kodi, so it will write the config from memory to a file:
# systemctl stop kodi
2. edit the guisettings.xml file, then start the Kodi again so it will read the configuration:
# systemctl start kodi
3. verify if the file changes preserved after restart:
# systemctl restart kodi
It worked for me, even after several reboots the aspect is still correct: 1.000000
Thank you for this! While my LE installation works (and looks) just great, I was always slightly annoyed that after a fresh install I had to go into the Video Calibration section and tweek my pixel ratios to get them to 1.000 and it would often jump from .998 to 1.001 or something like that while using the left/right buttons on my remote. It took several attempts to hit 1.000. Now I can just edit the guisettings.xml file.