Yes, the problem does persist. I don’t know if this is a Chromebook only issue. However I got round the problem under “Adjust Sceen” by using Aspect Mode: Custom, specifying different zooms for Height (100%) and Width (83% – see below for reason why).
1280×800 = 16:10
4:3 desired resolution
(4/3)/(16/10)=0.83333333
The circles are true circles and not ovals. It would be ideal if a future Magic DOSBox update included a 4:3 auto-adjust for widescreen monitors (happy to play with L + R bars).