What causes the VHS rewind effect? And how did rewind preview work?
In helical-scan video players, the tape is wrapped around a rotating drum that has one or more magnetic pickups (heads) that are the width of a track and angled slightly from true horizontal. Each track is several inches long and laid down diagonally at (roughly) the same angle as the head is tilted. (The angles differ because the relative motion of the tape and heads causes a precession, an "active angle").

When the tape is moving forward at normal speed, the rotating head aligns with the angled tracks and all is fine. When the tape moves in reverse the angles are misaligned, and when the motion is faster than normal the heads will "sample" more than one track during a video frame, and pick up some of the inter-track guard space as well (the static). 

This is what you see when you rewind. Nothing about the orientation of the data on tape changes, so there's no reason for the images to be inverted. If the drum rotated in a different direction then you'd see something else.