This is controlled by the general WP Settings : Media admin. You can set the max height/width of the various auto-generated sizes – thumb, medium, large. The image can be left proportional or made square – any yours is set to make square apparently.
But WP does whatever it does automatically, and I don’t know of any way to control which part of an image is cropped.
If you change the settings to make thumbs non-square, there are plugins that will automatically regenerate all the thumbs/medium/large images. Depending on the size of the original image, you can get a 4th size called full which is unresized, and the largest image is used to generate the thumb/medium/full media library images.
But image handling is not a theme responsibility.