There's nothing weird about that. It's unused overscan from a typical broadcast use of the screen space. The bottom has VHS head noise. All of that should fall into the television overscan, something you won't see on tv. You'll just lose quality trying to remove it, and it's unnecessary. If the black bar is visible on screen, just do it.
If you insist on fixing it, do this (and EXACTLY this, don't alter the numbers shown):
I suggest encoding to 352x480 with 5000k CBR. Put 5-6 episodes per disc. More TMPGenc Plus settings:
- HIGH motion quality. MPEG-2 MP@ML, VBV 224
- Interlaced encode mode, top field interlace on the source (second tab, ADVANCED, shown in image above), 4:3 29.97fps, 9-bit DC.
- On Quantize tab, put default matrix, uncheck all boxes that can be unchecked.
- GOP tab should be closed GOP, 1-5-2 / 1-18 (default), detect scene, last one unchecked.
Only use TMPGEnc Plus 2.5, not anything else, not another version.