You are wrong and here is why:
Both TV and DVD in the US/Japan are NTSC, ~29.97 fps.
However, film frame rate is ~23.976 fps.
Most anime uses film frame rate for its animation, with occasional sequences with NTSC (like the OP/ED, especially with scrolling credits).
~120 FPS is the lowest common denominator of these two frame rates. What the encoder does is puts 0 byte frames to fill the remaining fps, which are skipped on playback.
Why do this? It is a hack to allow variable frame rate in AVI, so you keep the film parts film and the NTSC parts NTSC. If you changed either one to match the other, it would look jumpy.
tl;dr: It's fake variable frame rate, it's not actually 120 frames per second.