Don't mess with the clips' aspect ratios. Choose the desired AR for your overall project then either accept the black bars that naturally come from the clips shot in the other AR or use the PiP Designer to zoom in enough to fill the frame (which will also shift some content offscreen).

You can also choose to do what TV news shows do when playing a vertical video on a horizontal screen, which is to place a blurred and zoomed image (or synced copy of the same video) as the background so there aren't any black bars.