Q)
If the PDF uses transparent images, would the converted HTML retain the transparency?
A)
No, for html/epub conversion, all non-text, and potentially some text, are reduced to a simple background image, with no transparency. Transparencies are rasterized during conversion, so the output looks the same as the input document, but is simpler to render, especially on mobile devices, and minimizes the files size (since there is no alpha channel).
The same applies when using PDF::Flattener class in e_simple mode.