-1 star bcs this is not open source...

Weird thing, this extension appears to be a clone of an extension by a Mozilla employee that came out a year before. Even has the same name, etc. Otherwise, this does exactly what it says and doesn't introduce any problems.

https://addons.mozilla.org/en-US/firefox/addon/transparent-standalone-image/

The extension above also has the source repository publicly visible.

Regardless, I've personally uninstalled it as I also had the Stylus extension already, so have instead opted to remove the styles myself and reduce one extension.
If you happen to use Stylus already, you can use this to achieve the same result:

@media not print { head + body > img:first-child.transparent[src][alt] { background: none; } }

You can add a menu item or button to turn it on or off.