Encoding aspect ratio
You chose the aspect ratio that works best with your actual content. In your case, probably square pixels.
That option is there for content that you want to be stretched in some way when viewed on the screen.
For example, let's say you recorded the content with one of those older HD cameras that record in 1440x1080 interlaced, and when played on TV the content is stretched to 1920x1080. In the actual video file, the pixels are horizontally squished, you get 1920 pixels squeezed into 1440 pixels.
If you want to maintain aspect ratio correct, then you'd chose HD Anamorphic 1080 (1.333) and this is an indicator the player detects and automatically resizes the width to 1440 x 1.333 = 1920 pixels and leaves the height 1080 pixels, so you get the desired 1920x1080 pixels frame.
As another example, let's say you have a widescreen movie, but you want to make a NTSC DVD, where the resolution is 704x480 or 720x480. If your widescreen movie is 16/9 that means the actual video would use only 704x396 pixels out of the 720x480 frame, leaving 84 pixels unused, black, which sucks, it's waste of space for the encoder.
So what you could do instead is take your original master, which is 4K or better quality, and resize it down so that all 480 vertical pixels are used, or almost, and you get for example 854 x 480 frame and you can squish the image horizontally down to 704 pixels.
You encode the video as 704x480 pixels but set the aspect ratio to 1.2121 or 40:33, which tells the video player to take that 704x480 and multiply the width by 1.2121 and get to 854 x 480 pixels, the proper 16:9 image.
Your content is 1920x1080 and the pixels are square, you don't have to stretch the image horizontally or vertically, so no need to specify an aspect ratio. Leave it on square pixels.

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