That should definitely work.
OK, so things are a bit weird in fullscreen. I'm using the Windows version, with an old monitor that only goes up to 1024x768. I dropped the chocolate-*-setup.exe files from normal chocolate doom into the new directory with these exes. All of this applies to all games.
It seems to run in one of the "horizontally squashed" video modes, i.e. 1024x800. Your monitor seems to mistake this for 1024x768, so the 32 vertical pixels are missing.
When "Fix aspect ratio" is on, and "Full screen" is also on, the display is too tall for my monitor, and the bottom or top gets cut off. [...] It doesn't matter what resolution I select as long as it's < 1280x960, this is how it always looks and the monitor always reports that it's running at 1024x768.
Yes, that is indeed expected.
If I turn "Fix aspect ratio" off, the monitor resolution gets set at whatever I choose, but the actual game is displayed at 640x400. It makes sense that I can't get a larger window since the next multiple of 640 is higher than my monitor resolution, but I would have expected it to use 640x480 instead.
Regarding aspect ration correction: The game is always rendered on a 640x400 "canvas". If you enable aspect ration correction, this canvas is vertically stretched (or horizontally squashed) to 480 pixels in a post-processing step to emulate the look of this video mode on old monitors (that typically had square pixels in 640x480 VGA mode and stretched Doom's picture to fill the whole screen). Yes, pixels are not square anymore with aspect ration correction enabled. If you disable it, the game content will be rendered as is, and that means (multiples of) 640x400.
Phew, at least. :)
In windowed mode, everything looks fine and as works I would expect.
I should probably disable the preference of the x2 scaled mode in chocolate-setup.
Lastly the setup program seems to try to default to either 1280x768 or 1280x800 a lot of the time, for whatever reason.
It should be fine to run "chocolate-doom -1 -fullscreen", but that currently crashes with a segfault:
I'd be fine with just being able to run at 640x480 fullscreen, but it doesn't seem possible right now.