I'm sorry to contradict you, but the images I use are always edited by me, and are guaranteed 500x500 without any white borders.
I've tried what you suggested. Without checkmark the image is stretched and fills the frame (as is expected). With checkmark (so correct aspect ratio) the white borders appear.
I've also remeasured the frame. Ofcourse this depends on screen, resolution and scale. My screen is a brandnew laptop Acer Aspire A515-52G running Windows 10-1809 and Mp3tag 2.94, resolution is 1920x1080, with scale 125%. As mentioned in above screengrab, the frame measures 154x162 pixels, which is NOT square.
Changing the display scale in Windows10 Settings to 100% gives a frame of 124x132 pixels, at scale 150% 184x194 pixels, NOT square either.
In the Main Tag Panel the image is displayed correctly (no white borders), both with or without checkmark.
This white frame screenshot below is made with PrtSc function in Windows 10 and edited with Photofiltre Studio X. This program allows pixel-perfect editing. It again shows that the frame in the Extended Tag Panel is NOT square.
This is the image, so you can check for yourself:
Is your frame really square, as you say? Then I'm curious to learn what the differences between my system and your system are.