Sometimes setting a layer to be transparent results in large portions of the layer remaining entirely unchanged. I have found no consistency as to when photoshop decides to ignore the command, but when it happens there seems to be no solution besides just deleting the entire layer and redoing it. Duplicating the layer duplicates the glitched portion as well.
This issue comes up occassionally but I haven't been able to solve it, instead having to either work around it or simply abandon whatever I'm working on to redo it a different way. Searching adobe for the issue only yeilds results about the background grid being not transparent when exporting PNGs, so while there may be an existing answer, this website makes it impossible to find it.
Even exporting the image retains the glitched area, so it's not just an issue that shows up in the program. You actually can't use the image once it happens, since it becomes a permanent part of the layer.
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