imma dumb and understand little on how that works. can you explain further?

First, it's important to mention that I've designed my game engine with a limit of four colours per palette. In order to be compatible, a texture must have a matching number of colours. However, before the update, my textures used four channels: red, green, blue, and alpha. This allowed me to create textures with four colours and transparency, which was a bit overkill because I only work in grayscale. Since the latest update, my textures now only have one channel: luminance. This reduces the amount of stored data significantly, but no longer permits transparency. Following this change, I've also improved my palettes so they can now hold transparent colours. This allows me to get rid of the background colour from my texture files, at the cost of one of the four colours available on that palette. Ultimately, this change will become extremely useful in projects to come. But for now, those are a secret to everybody.