No, this is not downconverting, this is merely scaling. For downconvert you need hardware such as a Kona card, or software, like Compressor.
Or I believe you can downconvert it with the Media Manager.
You can go anamorphic if that’s what you like.
The cool thing about scaling is that you can move itt around (pan and scan) or zoom in on it. I recently did a 720p project with 1080 footage, pan and scan was very handy and cool, smoother than most camera moves.
Have a wonderful day.