There are others far more knowledgeable than on I on this topic. so if a true SME comments, follow their advice over mine
with that said
- I'd leave base canvas and output at same resolution, so you aren't dealing with re-scaling.
There are re-scaling options, each with their own pro's & con's - and I'm not expert in them, just pointing out there are higher quality options, at cost of extra computational load.
Now, the question I have for you is whether you plan to use your webcam at native resolution (ie fill a 1080p window) OR, are you doing a small picture-in-picture with the webcam (which obviously requires resizing (ie re-scaling) already)?
*if* you are re-scaling the webcam feed, then I wouldn't try to match base canvas to webcam native resolution, as webcam resolution isn't that relevant. What resolution do you plan to game play at? IF you are planning on using your full monitor @1400p, then that should be your base canvas (I'd think, I'm not a gamer). If you want to stream at 1080p, then create a 1080p window and game play in that (if possible/practical vs full screen)
- And then you have to ask yourself if you are going to record locally. If yes, and assuming adequate compute power in your system (CPU, GPU, RAM, Disk I/O, etc) then I'd keep Base canvas, out, and record all at same resolution (no re-scaling). This requires adequate bandwidth if you wish to stream at 1400p. [I don't use Twitch so can't comment on resolutions for that CDN]. You can record at 1400p and stream at 1080p, though that requires encoding for 2 streams, effectively [1 to disk, 1 to Twitch], so requires encode power for that. ymmv
I have read to set output it at 1080p as that's a good quality for twitch, but i have also read that i should i set the output to 720p as because that is half of my monitors resolution there will be no quality loss.
That comment doesn't make any sense to me, as stated. of course using 1/2 (50%) of resolution your are capturing will involve quality loss. That said, Even multiple tend to be easier computationally, therefore maybe less lossy, than non-even amounts. but it depends. (I think)
I'm sure there are considerations I'm not thinking of, as a non-gamer, but hopefully this helps point your research