The Power of Masking

AE notes the transparency of every single footage file it handles. If the file already has an Alpha Channel embedded within, then AE will ask how to interpret it. If the file has no Alpha, then AE will add a completely white mask - one that reveals ALL pixels fully, corner to corner. In an Alpha Channel, any area that is black will cause the corresponding area in the footage to be transparent. Any area that is pure white will be fully opaque. And any area that is a grade of grayscale (x 256 levels) will introduce an area transparent of that percentage.

Fullmoon.tif has an embedded Alpha channel that defines the area outside the sphere. Interpreted correctly, this mask is used to block any pixels that are not the moon itself.