Elgato Video Capture can use video with an aspect ratio of 4:3 or 16:9 as input. The aspect ratio settings will stretch the content to the appropriate size, as opposed to performing a crop/masking operation that removes the top and bottom of the frame.

If your video source is a letterbox source (a 4:3 aspect video with black bars on the top and bottom), then the correct aspect setting is still 4:3. Using 16:9 will stretch the video, resulting in distorted output.