Do I use "square pixel" setting when upscaling HDV footage?

no it’s not, but that resolution is mainly for 4:3 equivalent to 1080p

I was not aware your video was already at that resolution, for some reason I assumed it was SD resolution at 4:3. in that case 1920x1080 sounds right. or you might consider 4k upscale as your source is at a peaty much good quality.

Now that I am thinking about it. since your video is at a high quality, I would deinterlace it using Hybrid as lossless (follow this guide), then upscale it using Gaia HQ AI. I think you will be getting much better results with less artifacts.
you can do a 10 sec’ preview in TVAI instead of attempting to upscale the entire video. you can do Gaia HQ 10 sec test (after you deinterlaced it in Hybrid) and Dione: DV on your original HDV file, 10 sec preview and see which one produces better quality.
you can use video-compare tool for that as well…

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