I just noticed that watermarking a .png-image with a watermark (also png) that has transparent background fails and just inserts a blob.
Watermark on png
http://zimg.se/image/9S
Same watermark on jpg
http://zimg.se/image/9Z
Watermark on png
http://zimg.se/image/9S
Same watermark on jpg
http://zimg.se/image/9Z