Maybe he preferred the higher bitrate file, not noticing that it was cropped to the scope frame? Easy mistake to make.

Anyway, Harmy has said that the AVCHD version, while at a lower bitrate, will probably look better than a re-encoded version of the MKV (it having been encoded directly from source).

That said, if you prefer to use the MKV (to preserve your Spleen ratio, or just if you feel like seeing what happens) I can recommend UncropMKV as a friendly all-in-one encoder to make BD friendly video (it harnesses x264 together with a straightforward letterboxing script).