Adding alpha bands to processed image blanks out the existing Black/white colours in the image within the area of interest

Yeah this is annoying. If you have an image already with white on the outside and then you use FME to reproject you will end up a black border outside the white and now you have both black and white pixels. If you then try and set an alpha band based on black and white pixels you will end up small holes in the data where you have actual data, sometimes this is ok but it's not ideal.

My best advice is to create a polygon that represents the boarder of the area of interest. Use RasterInterpretationCoercer to go from RBG24 to RGBA32, Use the clipper with your polygon to get rid of the white, then reproject.

Creating the alpha band before performing any operations means that FME will use it during operations.