When I call this Workflow from Automator the output image is nearly the same as the input image without removing the transparent shadows. In my case I take Screenshots as PSD files and the Quick Action only converts the file to PNG.
I made a Quick Action in Automator using your workflow, and it ran OK for me against a screenshot of a window, saved as a PSD.
If you run your PSD file against the workflow (not as a Quick Action- just in Retrobatch), does the problem still occur? And if yes, can you send me the PSD file?
I had a very similar issue to this. I was using 1.44 and when I dropped a file onto my Automator app it actually did nothing at all. Downloading 1.45b1 fixed the issue and it works just fine now.