How to edit and replace DDS images (with transparent backgrounds) efficiently?

I am aware of UI Texture Squasher and used it a few times. However, there is an issue with transparent images where the edited images with transparent backgrounds will have a semi-transparent rectangular background (example).

This mod seems to work with no such issues — the overridden files contain transparent backgrounds, and the mod itself doesn't seem to suffer from semi-transparent backgrounds. I cannot reach out to the creator to ask about this. If anybody has a piece of knowledge about it, would you let me know too?