Or transparent so we could just use our wallpaper

I have no issue with something like that being added as a feature since I know lot of users want aesthetically pleasing stuff. However, I'll not do it myself, at least currently, I don't have time. Pull request need to be sent/updated.

Moreover, I personally will not merge a messy code like the one in that pull request in its current state. I have spent countless hours fixing old termux code and making it more readable and compartmentalized, don't expect me to approve messy code again and make it return to its old state.

• Things need to put into dedicated classes and sub packages, TermuxActivity has no business handling SharedPreferences, file handling, file choosers, etc. It should only have minimal code added that calls other classes. Further unnecessary stuff should not be added to com.termux.app package but to appropriate sub package.
• The View for background image and overlay should be disabled by default, instead of just null. Large photos should be compressed and also as per device display resolution, imagine a user selecting an image that is 2-10MB or more, that will/may be detrimental to performance depending on device and will likely cause an OOM and crash termux, depending on device state. There is currently some compression code, but output file size is not being checked. Size checks should be made, both on saving and loading, since user may modify file in background. Note that the image+all the terminal output buffers need to be held in memory. So if an image uses lots of memory, it will affect other parts of termux. For this, just a background color/tint would be best, it can be transparent too. The TerminalEmulator already has a background color, which is set by termux for the style, which alone might be enough for overlay tint or required for transparency (I haven't looked much at that code).
• The image chooser button is best added to the Style option in context menu instead of drawer.
• Exceptions, errors and info should be logged appropriately with Logger class at appropriate log level and LOG_TAG.
• FilePathFromDevice should not have kitkat code check.
• FileUtils should be used for basic copying, deletion and stuff.
• Strings shown to user must be added to strings.xml with msg_, etc prefixes.
• The "terminal_background.jpg" should not be hardcoded. It's also best added as a constant in TermuxContants and the image stored in ~/.termux. The overlay color should be loaded from termux.properties so that it can also be restored when user restores a backup, along with the image. There is no specific need for adding overlay color chooser, plenty of external sites for color codes, hex value validation should obviously be done. Also termux doesn't currently support saving values to termux.properties, so chooser isn't that useful.
• An option should be added to Termux Settings to disable background image loading, in case some faulty/malicious image causes termux to fail to start. Think "script kiddie" or just a bad image.

Once a new proof of concept is provided it can be looked into on how well it works and if any other changes need to be made.

Or transparent so we could just use our wallpaper

Like this shot @DethByte64 (*.jpg in background)? Here Termux:float is used over fotos-App. The same works also with RealVNC in parallel or X11, like in following screenshot (here with log output of XClient):

This is already possible now and after merge of app+float and with a common Toolbox (ExtraKeys) it would be perfect :)