It “makes up” the sky to intentionally create a 2x1 format panorama for correctly using in a 360 panorama viewer … as per : Interactive 360 Panoramas - How To Post on GADC (albeit the “made up” bit in the example there is a manually added solid blue).
The “made up” bit is what is vertically above you … and, what the M2P creates actually looks quite stunning when seen in a 360 viewer : Example
A 360 image is never designed to be seen “in 2 D” as per your post above, because there is so much distortion that enables a full sphere viewer to realign.