The thing is, the converter might be removing the alpha layer? Because of all the texture stuff I've done in COD4/5 the only thing that creates the transparent background for decals is the GE128 punchout white/black alpha option, its what you need for say the tree branches on foliage to work.
Maybe the assman they use can set the white background to be removed, but if their decal had any white in it this wouldn't work. Maybe they have transparent backgrounds, like PNG does, but once you convert them they end up being filled in with white? I can't recall if tga/dds can have transparent background. I know COD4/5 assman accept JPG, DDS and TGA, maybe their new assman accepts PNGs with transparent backgrounds.
If you have a decal with a white part of it, like a road sign, I know of no way they'd be able to remove the background without messing up the decal.