A signal that has side black bars and top/bottom black bars is a letterboxed widescreen in a 4:3 signal The term Letterbox was originally created for 4:3 TVs that were showing black bars at top and bottom for a wide screen movie.
If you are receiving a 4:3 signal (SD) and it is letterboxed, AND the TV is in the NARROW format, that will then show a wide screen image in the middle with back top/bottom and side bars. A 4:3 signal that already has top/bottom bars and TV is adding side bars to keep the 4:3 signals 4:3. Your cable box is also capable of doing this to some signals so the TV would just think it is a 1080i or 1080p signal coming in with a lot of black.
It should be noted that when the TV is receiving a 4:3 SD signal and upconverting that to 1080p (which is 16:9) and the TV is showing side bars, those side bars are added to the signal because the TV has to tell the pixels in the bars to be black. It is not just a matter of not using the black pixels area, black is a color and the TV must tell the pixels to be black, so the final displayed signal includes the side bars. If the 4:3 signal is letterboxed, the originators added the top and bottom bars and as far as the TV is concerned, that is part of the original signal.
On the TV, there are always 1920 pixel addressed on each line and there are always 1080 lines in total. The TV must tell each pixel address what to do. A SD signal really has only about 680 - 720 pixels on a line and only 480 lines. If the TV did not convert, then a SD signal would always look a letterboxed image in a 4:3 window except for even smaller, (only 480 lines total 600 lines less than the screen).
As for the “Mitsubishi says” or “if it really is upconverting”, there is no “says” or “if really converting” – the TV is upconverting, there is no “if” about it. You may not like the quality, but it is upconverting. My opinion is the TV is much better than my cable box at upconverting, but my cable box is a 2nd generation HD cable box and not that good. All upconverted SD looks much worse than real HD; however different upconverters have different quality.