Video decoding method for decoding part of bitstream to generate projection-based frame with constrained picture size and associated electronic device

A video decoding method includes decoding a part of a bitstream to generate a decoded frame, wherein the decoded frame is a projection-based frame that includes a plurality of projection faces packed in a projection layout with M projection face columns and N projection face rows, M and N are positive integers, and at least a portion of a 360-degree content of a sphere is mapped to the plurality of projection faces via projection. Regarding the decoded frame, a picture width excluding guard band samples is equal to an integer multiple of M, and a picture height excluding guard band samples is equal to an integer multiple of N.