When a user selects a PNG image with a transparent background via the standard Image component, the dynamic media image URL rendered transforms the transparent background to white instead. This creates an undesired white block around the image when used on a colored background.

The issue is that by default Scene7 DM renders PNGs with white background, and you have to pass a fmt=png-alpha argument to DM in order to preserve the transparent background.

Yes, an author can technically add fmt=png-alpha to the provided "Image Modifiers" field, but preserving the transparent background should really be the default, especially since using the image in lower environments potetnially w/o Dynamic Media and thus using the image directly from the AEM DAM will preserve the transparency.