No, you got it backwards. On a CRT TV via RCA, S-Video or RGB cables the game would be narrower and black bars would either be minimal or not visible - that depends on the overscan settings of each CRT TV. You can simply boot it on a CRT TV if you don't believe me. I hope you do, though. I've worked with tons of CRT TVs and that's why I know what I'm saying. This is how people played Shenmue on their DCs since 1999. This is how SEGA tested the game during its development. There's nothing strange about this. This is how games used to be made on consoles. You never played Metroid on a NES? The Samus ball is not round there, but it's designed that way. What developers usually did was making the sure the overall presentation suited their design and the menus were often squeezed, mainly because they would normally be on the edges where overscan could crop them.
Yes, I literally counted the pixels to show that it's not round and never was. Sonic's belly is oval on every SONIC SEGA logo you can find. That's its design. The poster was wrong about it being round and I simply showed it. We are talking about pixels here, so it's natural they will be important. This is literally about ~10% of pixels in the game.