Photo sizes in blocks

Bear with me because I’m having a very hard time understanding about photo sizes and thumbs etc. I’m using block 4 on my category pages. The icon for Block 4, looks like it will display 4 pictures, all the same size, rectangular and the thumb is 324 x 160.

I added 4 pictures of different sizes in my media and they show up as different sizes on my category page. I was expecting that each photo would be automatically cropped to 324 x 160 on the category page.

My photos are 1698X1151 376×326, 1024×69. On the category page, one is a square, one is a fat rectangle and one is a skinny rectangle all in Block 4.

Thanks,
Stacey