This might be not entirely correct, but as I said I think that the Gears engine does use an extra texture to define where the model is transparent and were not. Take a look at this:
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Of course this is from FFX a PS2 game, but it shows exactly what I mean.
Because the real transparency texture isn't used and only a transparency by brightness is used instead, we see these strange box like effects. So far I can tell that even the remastered FFX version has this issue, but I can only see that is an issue for the hair so far.