That checker represents a transparent background. is shows you where there is "nothing" so you can add your own background, which is the whole idea.Not that impressed.
Simply substitutes the background for a checkered one.
If it left a plain background it would be excellent.
AI, or to be more precise, Machine learning (ML). Same thing that is used for autonomous driving, beating chess grandmasters and scanning x-rays for cancer etc...How did it do that so quickly ? Frightening.