Quote Originally Posted by lat9 View Post
Regarding the no-watermarks, I'm guessing that the site's setting for Configuration :: Images :: Cache File-naming Convention is set to Readable.

It appears that when that format was introduced that it unfortunately 'forgot' to include the watermarking. Sigh.
The current GitHub repository contents (https://github.com/DivaVocals/zen_Image-Handler) now contains the correction for those missing watermarks and also provides support for webp image types (thanks @brittainmark).

That updated release (v5.3.2) is forthcoming.