What this tool can and cannot do
It removes one colour, and colours close to it. That works well when the background is solid or nearly solid: a logo on white, a product photographed on a white sweep, a screenshot on a flat colour, a scanned drawing. It does not recognise people or objects, so it cannot cut a person out of a street or a living room. Backgrounds with several colours, textures or gradients need a selection tool in a photo editor or an AI cut-out tool instead.
How the background is found
The tool reads the four corner pixels and takes the colour most of them agree on, which is the background in most logos and product shots. If that is wrong, click the preview on the background, or set the colour with the picker. With “Only remove background touching the edges” on, only matching pixels connected to the border of the image are removed, so the same white inside the subject — a highlight, the counter of a letter, the white of an eye — is kept.
Tolerance and soft edges
Tolerance is the distance from the chosen colour, as a percentage of the distance from black to white, that still counts as background. Photos and JPGs need some tolerance because their “white” varies slightly; 12% is the starting point. Edge softening fades pixels up to 10 points beyond the tolerance where they touch removed pixels, which smooths jagged outlines. A pale halo of the old background can remain on anti-aliased edges, especially when the new background will be dark.