Actually that was intended behavior to show cropped Images on the stream item, if not it will not show the same stream layout with other different type of stream item on the page. Imagine if the photo height more than the width and if we decide to show the full image on the stream item, the stream item will become longer and it look ugly.

If we make it show the fixed photo size on the stream item, it will make the image quality not good, the photo will look like stretched.