Hey! I had this exact problem happened to me and it took a long time to figure it out. I even posted on the anki forum page, lol, but ended up figuring it out at the end...here was what I did:
What you first want to do is to update your Anki to the newest version, and then delete the add-on, and re-add the add-on again. Try that and see if it works. Some people said they had successes with this.
If that doesn't work, here was what FINALLY worked for me:
1.) Click on "File" >> "Switch Profile" >> Add
That's it. I just made a new profile, then made a new deck. I tried image occlusion on the new deck in the NEW PROFILE, and it worked perfectly - with both JPG and PNG files. It works on my Android app, too!
I then imported all the decks from the previous profile to the new profile, and checked again to see if image occlusion still worked - and it did. (If you import the decks and image occlusion stops working, then there might be something wrong with your previous decks.) - If you need help in transferring all the decks from old profile to new profile, refer to the bottom.
Another tip - sometimes in the SVG editor, when I'm done with the rectangles and click on the blue icon (add notes with non-overlapping occlusions) or orange icon (add notes with overlapping occlusions), a note pop up that says "X notes added". What you then do after that is absolutely critical. You have to:
1.) Click "SVG-Edit" at the top >> New Image >> OK
BEFORE closing out of the window.
If you close out of the window before doing this, the image occlusion thing doesn't work and it doesn't add your notes. You then have to re-start Anki and it's super annoying because you have to do this for every note. And it funks up image occlusion.
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For me, even though I made a new profile, the image occlusion still does not work in my OLD profile.
To import your original deck into the new user profile, do this:
1.) Go to your original profile
2.) Click on the dropdown menu next to the deck(s) you wish to export >> "Export" (I have attached an image).
3.) On the pop-up window, next to the "Include" dropdown menu, select which decks you would like to export. You can click "All Decks" if you want to export out all decks.
4.) If it's not already checked, check both of the boxes that say "include scheduling info"/"include media".
5.) Click "Export"
6.) Select a folder where you would like to save the files to. (I created a folder on my Desktop for easy access) >> Save.
7.) Click on "File" >> "Switch Profile" >> Go to your new profile
8.) Click on "File" >> "Import"
9.) Find the folder where you saved the previous files (easy if you have it on Desktop), and select it >> "Open"
TADA! Should have all your original decks on the new profile AND your old profile. I also tried doing image occlusions on the old decks that I have moved from my original profile, and it WORKED (in the new profile)!! Hallelujah.
Let me know if this works!