I'll make a stab at this, seeing how no one has responded at all for over a week. I have a DVX-100B myself, but I have never used this mode. My understanding is that it is emulating anamorphic digitally, not optically, and even though the output handles just like real anamorphic, the quality is not as good, much like digital zoom can't match optical zoom.
Now that I've stuck my foot in it, maybe others will jump in to tell me how wrong I am, and in the process answer your question with authority.