@Hildi_Pardo and @dbrace just a note on this, the video you uploaded is 956x720 which is, by definition, cannot be played back in higher resolution than 720p. This can be because either the recording was made on an external monitor with very low resolution or because you may have used Screencast-o-matic's region selector (given the unusual aspect ratio of the video) and you intentionally picked a small region of the screen.
In case it is the latter, than I'd suggest trying the Size selector and go for Hi-res in Screencast-o-matic in edit mode and see if it can scale it up for you. For example, I selected a 956x720 resolution part of my screen, but that's just how Screencast-o-matic defines the pixel count, my macbook in reality has much more pixels and can scale it up to high resolution, which in Studio will playback in 1080p.
And here is some sort of strange behaviour because when I do this, the video automatically selects 1080p for me. We'll see what we can do with this, until then I'd defer to the size selector on those cases.

