You are correct but the whole point of these devices is that they are mass produced to do all that for you. You don't need to configure anything. What you get out is "(MJPEG) 1080P 30FPS" 720x480 is scaling the output MJEPG 1080p down not the source file.

For why see https://www.youtube.com/watch?v=ZC5Zr3NC2PY