ATEM 1 M/E — Upconvert SD Input 1?

Our church will be upgrading our old video mixer (it's a Videonics MX-1, in case you need a laugh) to an ATEM 1 M/E. We have one NTSC camera that will be connecting via Y/C to input 1 and a couple computer HDMI inputs as well. Our outputs are mostly composite NTSC, with a couple HD TVs that currently showing pillarboxed 4:3.

I was originally thinking that we would run the switcher in SD mode, but then I realized that it might be smoother for us, especially as we transition to more HD input and output devices, if we ran it in HD mode and center-cut the downconverted SD output. I'm assuming that the ATEM will upconvert and pillarbox the S-video coming in from the camera on input 1, but I haven't been able to find confirmation of that in the docs or online. Is this in fact how it behaves?

Does anyone have advice/experience in running an ATEM in HD mode in a mostly SD environment? Is it too much hassle, or does it work fairly smoothly?

Thanks!