When using the default style without variations enabled, the overlay background is opaque black:
It seems .overlay-container has background: #000000; on it, if I disable this in dev tools it changes to the desired blur effect. If variations are enabled on the style it works fine.
Thank you for reporting this issue, it has now been resolved. We are aiming to include any changes that have been made in a future XF release (2.3.0 Beta 2).
Change log:
Fix some transparent backgrounds when variations are disabled