I have a png in my mipmap folders (the icon is the same, just scaled up/down) to use for my app on the launcher screen. Here is one of those png(s):

And here is a screenshot of what it looks like when I install it on my device (a Surface Duo). Notice in the screenshot that you can tell that it does have the rounded rectangle mask, but that there is somewhat of a "hole" in the bottom center, where you can see a small part of the original icon:

And when using the app, tapping the square button (in the lower right) uses (I am assuming) one of the icons, but it adds a solid colored background (which I am guessing was specified somewhere in code, or maybe it is just the default background), but still shows the icon correctly. Why does the icon look so strange in the launcher?

