Images are not really circular...
They are square/rectangular with the section to not be visible alpha'd out.
Alpha is simply the case of setting parts of the texture to not be visible. If the images didn't have the area around the circular area alpha'd out there would be a white section all around the image.
This is the player frame file for example:
https://www.townlong-yak.com/framexm...layerFrame.xml
And this is the section where the player's image is placed. Notice it is fully square and not round. The image that is fitted in will simply not show the part it doesn't want shown.
Lua Code:
<Texture name="PlayerPortrait">
<Size x="64" y="64"/>
<Anchors>
<Anchor point="TOPLEFT" x="42" y="-12"/>
</Anchors>
</Texture>
So, as long as you have a texture that has the areas of the image to not be displayed set to alpha state of 0 and the areas you want displayed to an alpha state of 1 ( or any value above 0 for varying levels of visibility ) and some texture elements designed to hold that image. It should work fine.
I can't remember off hand which paint packages will work this way but I think I used to use Paint Shop Pro for alpha adjustments to images and I think they can create TGA images which were usable by WOW way back when.
I found this page which may help you create images, if it lets you save in tga format for use in wow. Otherwise you may need a converter tool to change from the file format to tga. If you have your own art package then you may be able to use this with the tools available in that art package.
https://www.thegunnysack.com/how-to-crop-circles/
Hopefully someone with more recent knowledge will be able to help further.