You can't enable it when viewing a palette-based PNG.
In case you want to say "technically it doesn't have an alpha channel but a tRNS chunk": I knew this.
But by enabling this option, you can still show these pixels' transparency properly, instead of just showing their color, which is useful.
And it actually still works on palette-based PNG: you just can't enable it when viewing one. You can still enable this option from another True Color image, and move back to your palette PNG -- it WILL show checker pattern on transparent pixels just fine.
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And funny enough, the "Use transparent index" option actually does NOT work. Enabling or disabling it has no effect: my transparent pixels will still show as pure opaque.
View -> "Use alpha channel" option unavailable when viewing palette PNG
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