Some of our compositing elements have transparent backgrounds so that you can use them right away with normal blend mode. However, Final Cut Pro does not fully support creating proxy/optimized media for video clips with alpha channel and as a result, the transparency is lost in the optimized media.

To resolve the issue, please remove generated optimized media (select the clip in the library and run the File > Delete Generated Clip Files command) or import the clips with the automatic optimized media creation disabled and make sure that in the View menu to the top-right of the viewport, Media Playback is not set to Proxy Preferred or Original (and not to Proxy Only).