I am not able to replicate the issue when importing landscape mode iPhone videos into iMovie. They display in the timeline preview screen as wide screen.
So, nothing to do but experiment a bit and see if you can resolve it. Put the clip into a new project. Do you get widescreen timeline display there? If not, export it to your desktop. Do you get widescreen in the export?
Try exporting the clip with Handbrake and then importing the exported clip into iMovie.
It's difficult to address this in an electronic forum such as this because we do not have the capability of remotely accessing your Mac. You didn't mention what diagnostic procedures you tried with Apple Support so I'll list some procedures and you can try those that you haven't yet tried.
Deleting Preferences
Open iMovie while holding down the Option and Command keys and select to delete preferences in the box that appears. iMovie will open in a new library. Reopen your old library to get back to your projects. See if you can get a widescreen display. Possibly you may need to reboot to set the changes. Deleting preferences is a safe procedure that will not cause data loss or disruption to your project.
Opening iMovie in a new library
Try opening iMovie in a new library. To do that, open iMovie while holding down the Option key and then selecting to create a new library in the box that appears.
Opening iMovie in a new user account
Try opening iMovie using the \ Guest account on your Mac. See if it functions properly there. Or you can create a new user account.
Set up users, guests, and groups on Mac - Apple Support
Safe Mode
You could also try booting up in Safe Mode and, after everything loads, immediately shut down and reboot in normal mode. Then see if iMovie works properly.
Start up your Mac in safe mode - Apple Support
Updating iMovie
To update/redownload iMovie 10, drag your iMovie 10 app from the Applications folder into the trash, but do not empty the trash. Sign in to the app store and open your purchases folder by clicking on your name at the bottom of the app store side bar. You will see your purchases displayed, including iMovie 10. Redownload/update iMovie from there. If not successful, drag your present iMovie app out of the trash (if you moved it there) and return it to the Applications folder.
Resetting the System Management Controller
Try resetting the System Management Controller (but no longer available for the new M1 computers). It is easy to do. Just a matter of booting up while holding down certain keys.
Reset the SMC of your Mac - Apple Support
Resetting the NVRAM or PRAM
Try resetting the NVRAM or PRAM:
Reset NVRAM on your Mac - Apple Support
Use Handbrake to re-encode the clip and confirm its dimensions
Try converting your troublesome clip to H.264, Mp4/AAC with the free download, Handbrake. Do that even if the codec already is indicated to be Mp4/AAC. Re-rendering often cures the issue.
You can get Handbrake here:
https://handbrake.fr/
A simple way to do it is to open Handbrake and do a File/Open Source. Navigate to your video and choose it as the source from the resulting screen. Then do File/Start Encoding. Wait a couple of minutes for the conversion to complete. Then save and import the converted clip into iMovie.
If none of the above work, then at this point I am out of ideas.
-- Rich
