As of right now, the furniture item ‘canvas’ is the only canvas item that can do cutout PNG. Which is allowing for full transparency on an image if it allows it.
But what if I told you this is only a half-truth, there is a means to get PNGs to work on all canvases, letting their transparency work completely too! This goes for canvas cubes, cylinders, cones, domes. Anything that lets you put an image on. And this is what it looks like in use:
Here I’ve put an animated sprite sheet on canvas cubes. And full transparency works!
While right now it requires ‘technically’ a bug to work, it should be a feature in the game.