Capture One 21 Overlay tool

I've been using C1 20 on a MacBook Pro running Big Sur for some months without problems and previous OS versions for two years before that.

I'm shooting a large number of small product shots in tethered mode and use overlay to check size and view point of similar products. I have all previous images stored as JPGs. In C1 20 this worked well. Since upgrading to C1 21, the background of the JPGs now shows as BLACK with a jagged edge around the subject. I find this rather annoying. Is it a bug? Is there a setting somewhere where I can get rid of the blackness? 

regards

Peter Landon