The following command should resize an image to fit within 1200x1200, keep the aspect ratio and also ignore images that are smaller (so only downsize, hence the ^>, ^ since I work on a Windows machine).
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convert -resize 1200x1200^> source.jpg target.jpg
I ran the command again without the ^> part.
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convert -resize 1200x1200 source.jpg target.jpg
So in short, the setting used to force "downscale only", has the unexpected side-effect that it will also keep the aspect ratio by taking the smallest side and use that to fit the bounding box of 1200x1200, instead of the normal behavior where it would try to fit the largest side of the image and make sure that that fits within the bounding box of 1200x1200.
I would consider this a bug, but maybe I don't understand the settings of -resize in enough detail.