PracticalPorpoise

Found a fix to this problem in another thread and thought it might be helpful to post it here:

To fix this mess that Squarespace has created with their asinine default settings, do the following:

Menu > Design > Section Themes

Select the theme of the section where your images are displaying incorrectly.  You'll have to do this for all offending sections. 

Click on the offending image, which selects it's widget type in the styles options list.  Choose 'image overlay' and move the white circle in the bottom ribbon all the way to the left.  This will then display transparency correctly.  

How is this not getting more attention?  Squarespace doesn't appear to even honor transparent PNGs anymore??

Honestly I have found this platform to be the most frustrating tool for web creation I could ever think of.  It works great if you'd like their cookie-cutter vanilla design but best of luck getting it to do anything interesting and then on top of that, I get problems like this one to try to mitigate because Squarespace can't even get their basic sh* together.  I'm regretting using this platform more and more every time I'm forced to use it.