According to this, Apple Documentation on App Icons, "When iOS displays an app icon on the Home screen of a device, it automatically applies a mask that rounds the corners. Make sure your icon has 90° corners so it looks good after the mask is applied."
Currently, my app icons already have the rounded corners. I'll gladly color in that transparent space so that it has 90° corners, but the documentation doesn't specify whether or not iOS also applies the mask in Spotlight, in the Settings, etc.
I'm assuming it applies masks to every iOS icon in the AppIcons image set. Just looking for confirmation.