@[deleted]
Confirmed "Place in 360" can't be previewed properly in the sequence - this is a bug.
[Edit]: This bug has been fixed in recent versions.
About the distortion. This is unavoidable. "Place in 360" projects the 2D video on a very small portion of the 360 video - which is a spherical surface. This is a lossy process and a lot of information could loss during the process.