Can not auto extract sprite from textures?

The texture file is from official Paper2D Video tutorial:
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Hey,

Thank you for noticing this bug with this specific file. I have submitted a report to our developers which can be referenced as: UE-18258. You can try to change the grid by manually manipulating the fields after switching the extract mode. I wasn’t able to get it exactly perfect so it may take a few minutes for you.

I will let you know as soon as I hear word that this is fixed, let me know if you have any further questions. Have a great day!

Hi,

Use the manual mode in the sprite extraction dialog to extract these sprites, or use the image from the 2D sidescroller template that has already been fixed up to remove the low-alpha junk from the texture. I’ll see about updating the zip on the wiki to contain the updated texture.

Cheers,
Noland