Cross Dissolve only applying to one clip

I have seen weird things happen to lossy format images before in PPro.

Consider running the PNG through Photoshop and create a PSD file out of it (RGB color space, 72 pixels per inch at the preferred resolution), before importing in PPro.

Please let me know if this solves your issue.

Double click the cross disolve marker on V2. 
Close the duration popup window.
Then, in the Effect Control panel under Alignement, chose "Center at cut". 
Voila. 

Delete the Media Cache and Media Cache files:
https://community.adobe.com/t5/premiere-pro/faq-how-to-clean-delete-or-trash-media-cache-files/td-p/....

If that doesn't work,try resetting the preferences:
https://community.adobe.com/t5/premiere-pro/faq-how-to-reset-trash-preferences-in-premiere-pro/td-p/8236158?page=1

If that doesn't work, try resetting the Workspaces:
Reset a workspace
Reset the current workspace to return to its original, saved layout of panels.
1. Do one of the following:
• Click the Workspace menu icon and select Reset to Saved Layout.
• Choose Window > Workspace > Reset to Saved Layout.
from here:
https://helpx.adobe.com/premiere-pro/using/workspaces.html

If that doesn't work, try Preferences > Audio Hardware and set Input to None.

If that doesn’t work, try updating or rolling back your graphics driver directly from the video card manufacturer’s site.

If that doesn't work, try creating a new project and import the old one into it.

Another handles link:

https://www.mediacollege.com/adobe/premiere/pro/transition/handles.html

Clips need handles:

You are probably using the video clip (Facet 7 - Yogic Lifetyle.mp4) to the media end.  That is, you're using that clip to the last frame.  Assuming that this is the case, you need to set the Out Mark before the clip ends so that that transition has frames to work with.  Try selecting the Ripple Edit Tool, hover over the right edge of the video clip boundary and then click and drag to the left for 12 to 15 frames (more frames allows for a longer transition while fewer allows for a shorter one).

You can also select the Transition and adjust this in the Effect Controls.

This will shorten your edit and you may want to add time back to the tail of the PNG.  An audio adjustment may also be needed.