In order to create a custom Signature and Watermarks for Moodle Modules Certificate, there is some guidelines.
First, you need to create a transparent background images. Then the picture is set, you need to set the color - mode to indexed.
I'm using GIMP and just go to Color - Mode and then choose Indexed.
Then save the file as .png type.
If you get the following error "FPDF error: Alpha channel not supported:" that means you have not properly follow the guidelines.
For a signature, set the size to 150 x 30 pixels.