Hi Anthony, the settings in your screenshot only applies to the images when they are displayed in the stream.

The photo thumbnails are intended to display in square blocks in the album listing page.

You can however, add your own CSS hacks to display the entire image.
You can add this within your template's CSS file or anywhere you like.

body div#fd.es .es-album-item .es-photo-item.layout-item .es-photo em  {

    background-size: contain !important;

}