I think what is the case is your TV identifies the input based on the total lines rather than the active lines. There are many examples of people not achieving any difference in result on their display after changing either v.active or h.active. So your TV sees 626 incoming lines, deduces it’s 576p video, and determines the output should be 576 lines tall, no matter what.
Additionally, the flickering is probably due to the incoming signal being offspec. On-spec 576p is exactly 625 lines, and is exactly 50Hz. Your TV simply has poor tolerance to deviations from this spec.
Another example is that many displays fails to display linedoubled PAL PS1 or NeoGeo, because they output 314 and 264 lines, so linedoubled they are even further from the specification of 576p and 480p, respectively.
Bottom line, I would recommend you to get a different TV. Hopefully the compatibility list can be of help to you.