No, it’s not.
If I premultiply alpha for your png file (ImageMagick):
convert image.png -background black -alpha Remove image.png -compose Copy_Opacity -composite out.png
image.png.zip (15.0 KB)
This file works fine even with false flag.
UPD:
I can’t answer “why” . It shouldn’t work at all, because:
Defold engine uses premultiplied alpha internally
I don’t want to spend time for investigation of the strange behavior in this case, because we know that the problem in the wrong format of the image.