I'm trying to do something like this with Kdennlive.

I've managed to use keyframes to make the video smallerafter watching this, but when the video resizes, a black opaque background is behind the video. There is an option to set the background color, and mine does appear to be set to transparent.

I'm a bit stuck.... any help would be greatly appreciated!

Apply a Composite or Affine transition between the tracks and make sure to handle the target tracks correctly.

Great! Thank you!