At Ignite 2017, we announced the next wave of innovation coming to SharePoint pages to provide faster time to creation, enhanced control of text and images, increased promotion options, commenting an...
Updated Jan 30, 2018
Version 2.0
Blog Post
Prior to the in-system image editing features being introduced, SharePoint's preferred image dimension was 16:9. Proportions other than that were scaled or had white space added to get them to 16:9.
The behavior was inconsistent based on the web part type, web part display view, column scale and page scale. The image proportions that were distorted the most were square. The more you deviated from the 16:9 proportion, the worse the distortion got.
I wrote a http://www.straightenthemaze.com/2018/02/21/how-sharepoint-handles-images/ that includes examples, which may be helpful. It includes a handful of high-level "Rules" to keep images looking good.
While I haven't explored the impact of the new in-system editing functionality in depth, my assumption is that regardless of where an image is edited (in-system or prior to uploading) the display behavior will be the same.
At some point when I have some time, I'll dive into a full exploration using the in-system editing features and update the article. In the mean-time, I hope this info helps.
Cheers