Images are always loaded using cover style to make sure the whole background is covered. We don't update the wall paper while the screen is locked. We only load images on the lockscreen, ignoring shields.
Background can be set via
gsettings set org.gnome.desktop.screensaver picture-uri 'file:///file/to/background.jpg'
I'll revisit the way the actual wallpaper is loaded when fixing #910 so we can avoid for the XML and also more modes.
@snwh this slightly changes the settings margins, just in case you want to double check.