Spatial Conform and Compound Clips?

First issue: it appears that spatial conform for compound clips can only mirror how the nested clip is set. So, I have a compound clip (synced audio and video - source is 1920x1080), nested video is set to a spatial conform of none, so when I bring the compound clip into the 1280x720 timeline the compound clip's scale is with reference to the source rather than the timeline. When I apply the transform effect to the timeline clip, I see a transform box that is set at 100% of the timeline size rather than 100% of the source clip. A bit odd but not really a problem for scaling. However, when I apply an effect to the same clip, the effect crops the clip to this 100% of timeline size box. Is this just the way things are working currently, or am I missing something?

Are there any workaround for this that someone can recommend?

Thanks.