Transparent PNG has hard edge, despite enough room in orignal image

Hello everyone.

The following problem:

I have a png with a circle.

As you can see, there is plenty of room between the edge of the circle and the edge of the picture.

Now I wanted to apply a blur to this image and put it on top of another picture. But that created a hard edge, which is kinda weird, because the image should be big enough to leave room for the blur.

I already tried to put it into a sub-composition and to apply the blur onto that, but it resulted in exactly the same result.

I am kinda lost here, anyone got an idea?