When watching recorded or live TV in Media Portal, aspect ration keeps jumping between different modes. Both, TV and Media Portal aspect ratios are set to the manual 16:9.
The issue was caused by ViewModeSwitcher Media Portal Plugin. It seems to be pre-installed and enabled by default. Disabling this plugin fixed the issue.
Media Portal Configuration > Plugins > Process Plugins > ViewModeSwitcher.
Media Portal 1.24