my source material is 1920x1080, project is 1080x1080. So in theory I shouldn't loose a pixel..

Use Pan/Crop or put your magnifying FX before Pan/Crop in your effect chain

As I said @Vegas_Sebastian there's no Pan/Crop on the track level or Output FX level that I can engage as a global parameter. I also find the forced keyframing leading to operator errors or too many steps to go through. Maybe it's just me being not as savvy as I should be, but it's not the most intuitive tool to use.

Would be better to have a 'Pan/Crop' video FX usable as plugin, or an 'Aspect Ratio Correction' tool with a click box 'letterbox', 'pillar box' and 'fit to fill'. Simple, nice and easy, with some presets to fix the most common conversions.

And why do I end up not being able to use PiP to do this without being soft?

Pan/Crop and Track Motion (which I believe is now PiP) work differently. Pan/crop works at the original source resolution, which is why it is good for doing zooms and pans on stills. Track motion works at project resolution so if you zoom using that, regardless of the original source resolution, it treats it as the current project resolution, so it "blows" it up.

When I am making one video into several different dimensions. I make the largest one first. Then I change the project settings and use track motion on the video tracks to make it fit the way I way. Other events I tend to adjust manually one by one. When it comes to size and position adjustment in general I typically go for pan crop, but sometimes it has limitations like how small you can make it sometimes, in cases like the PIP effect can be better or used on top of it. I usually don't use track motion unless I want several tracks to move together. I prefer the preciseness of pan crop over PIP.

As I said @Vegas_Sebastian there's no Pan/Crop on the track level or Output FX level that I can engage as a global parameter. I also find the forced keyframing leading to operator errors or too many steps to go through. Maybe it's just me being not as savvy as I should be, but it's not the most intuitive tool to use.

Would be better to have a 'Pan/Crop' video FX usable as plugin, or an 'Aspect Ratio Correction' tool with a click box 'letterbox', 'pillar box' and 'fit to fill'. Simple, nice and easy, with some presets to fix the most common conversions.

And why do I end up not being able to use PiP to do this without being soft?

Have you tried to use your project file as nested object? Then, you can put your magnifying FX before Pan/Crop as Event-FX for that nested object.

@Vegas_Sebastian if the magnifying FX work at project resolution then I suspect enlargement to fill the frame will again lead to softness. Also, this seems more convoluted and not straight forward as I think it should be, really, especially when you're going through the edit process

@AVsupport I'm a VMS user so I may be missing something you have in Pro. The only way I can achieve what you want is using Event Pan/Crop and right clicking on the box to select "Match Output Aspect".

But with still images, Preferences/Editing provides for "Automatically crop still images added to timeline". Something similar for video images would solve your problem so that videos added to your square image project are cropped to shape instead of being fitted into the square with black letterboxing. This is effectively what you are asking in your post a few back. I'm surprised Vegas Pro doesn't have it. Consumer editors that I've used usually have the option.

@EricLNZ Unfortunately, here's no such thing as 'Match Output Aspect' in Event Pan/Crop in VP17. You can make yourself a preset for 1:1 square, but this will be applied with a keyframe at the cursor position, and not globally.

If you go 'the other way' and use Track Motion and blow the clips up to cover the whole 1080x1080 square by using 1920x1920, you enlarge again and image gets soft, because this also seemingly works on project resolution, not an option.

With over 20$ bn annually, Instagram has overtaken Facebook as the biggest advertising revenue machine, and like it or not, the square format and vertical stories and IGTV will be here for a while, there is an actual demand for this. VP developers would be clever to take note and cater for this opportunity if they want to keep and or increase their customer base.