Skin transparency broken

^{Update by [Mojang] Mega_Spud (Jay Wells):}
Summary:
Transparent parts of player skin are not showing properly, and just show as black.

Steps to Reproduce:

1. Equip a customised skin that has some transparency
   

Observed Results:
Notice the transparent parts just render as opaque black

Expected Results:
If the total skin transparency does not exceed the maximum allowable amount, then those parts should be invisible.

Screenshots/Videos attached: Yes

Notes:

Original Description:
Skin transparency appears to be completely broken- as any transparent pixel at all renders as black in-game. The images show the same skin used in 1.1.5 and 1.2