It’s resized, but really depends on the original image ratio.
That’s quite standard nowadays to provide a thumbnail with standard dimensions (so that the layout does not look disjointed and messy).
Please clarify which block you are referring to (perhaps the one from Gutenberg by default). Please note that our themes have their own posts block, but not ListingHive’s. If it is Gutenberg’s core block, thank you for your feedback. We will review the style conflicts before the next update.