The mod check the skin file to see if a specific point is transparent or not to set your player model to alex or steve automatically.
Just use a Alex skin to see if it recognizes.

I'm using this Skin:
https://minecraft.novaskin.me/skin/4786973219/Ayano-Aishi-Yandere-Simulator-Game-School-Anime-Cute-Girl
But when i using it, i still getting fat hands

Using: 1.20.1 Fabric

Okay, i figure out that my texture had Steve part, so i have to clean them
But, does it will support Transparent skin?
At my screenshots, it's example of CustomSkinLoader working(but works for your and this mod, have to clean steve hand part for switch to Alex model)
But your works much faster and better, but we would like to have transparent mode

Glad it worked out.
About transparent skins, I'm not sure, you have to test it yourself.
If it does not work with transparent skins, I have no clue how to enable it but probably require more modifying of vanilla code.