Thumbnails fit contain (respect original image ratio)

I’ve seen examples of sliders with thumbnails which where uncropped, keeping original ratio, so you can see in the thumb if an image is portrait or landscape.

But how is this done in combination with loading featured images from posts? There’s this nice option under ‘Thumbnail/Tabs > Thumb background fill mode : fill/fit/center/stretch/tile’ which does nothing at all…

Am I missing something?