I'm running Windows 10 Pro on a laptop, and I've had this same question for a while now. I knew that if I hit the key combo CTRL+ALT+F10, the display of the remote system shrinks and I get the black "bars" within the VNC window, just as the OP does. What I guess I didn't realize is that the VNC window will snap to the "correct" size if I click and start to drag a corner of the window. It's as if that part somehow got left out of the functionality and must be kick-started by the user.
I might be typing gibberish, but I hope this helps someone else!