In the new version (RealPlayer v.2020), we removed the function to automatically convert your downloaded videos to RMHD. You can only convert them to RMHD if you choose manually. We are not sure why this is happening on your end.
In addition, using RealConverter, you should be able to convert RMHD files to MP3. What errors do you see when doing so?
Lastly, can you reinstall RealPlayer v.2020 and see if it still continues to covert to RMHD automatically?
Looking forward to hear back from you.