Carousel settings below: Large, height of 290, gutter left in the middle, rounded corners off, arrow navigation, all other toggles off.

The first image is 1024px, the second image is 290 px.

Small carousel

Same settings as above, all images 290

Screenshots of the two above carousels in Twenty Twenty with all plugins disabled except CoBlocks

full size image carousel

carousel height of 300 – image height 1024

Even though the images are significantly bigger than the carousel, they’re downsized enough to almost fit – and not downsized enough to be within the height of the carousel so they’re cut off

smaller image

carousel height of 300 – image height 290

Even though your message said the images would stretch if they are less than the height of the carousel, these are only 10px less and stretched to a point that forces them to be cropped – rather than stretching to a reasonable height and simply filling the carousel.

responsive height

responsive carousel height – image height of 1024

It’s taller than the forced height carousels (taller than I want it to be) and the images are still cut off even with the responsive height

Twenty Twenty screenshot

you can see the images are still downsized (below 1024) but still cropped