Quote Originally Posted by Charles Moir
I'm not sure toggling the button would be good - because toggling usually implies back and forth to where they just started from.

However I think it would be preferable to make it so that rounded corners always remains rounded no matter how you squash or stretch the rectangle. If they really want to stretch the rounded corners as well, then Convert to Shapes first.
Something that could be useful could be an option to manipulate the corner vertices independently but symmetrically about all corners of the object e.g. by holding shift while dragging a vertex etc. This would allow for manual control of the aspect ratio. An option somewhere to allow a square aspect ratio to be applied/toggled would allow maximum user control.