Why Does Handbrake Convert 480P DVD Source VOB to 360P Output?

[pone44]

I'm using Handbrake against a VOB from a DVD. The original VOB plays in VLC with a 480P vertical height. After Handbrake converts the video to MP4, the MP4 is showing a vertical resolution around 360P.

Why does Handbrake make this change? I'm using anamorphic as strict in Handbrake settings.

Am I losing any information from the original video, and if yes how do I preserve it?

[Baldrick]

Handbrake crops the black borders. You can disable it and convert to 720x480p with black borders but it will not be any huge difference...