If anybody comes across this post: I've solved the issue by using version 2.0.8. In 2024.
vlc file.mp4 --width=840 --height=390 --no-video-deco --no-embedded-video --video-x=1921 --video-y=1
Can't believe 4 is in beta and we're still talking about --video-x and --video-y not working at all.