Generally the way those things are printed is that first a patch of clear film ever so slightly larger than the image is applied. That's followed by successive layers of ink in the colors required, or four color printed, and then a final patch of clear sealer is applied.
When you apply the liquid decal film, you don't have that control so you'll overlap it onto the unprinted paper surrounding the decal, which will bond to it.
You often can see the edge of the decal film, esp. on older decals. You want to cut out the decal image inside of that edge. So you have a little room to maneuver. Take your Xacto and just carefully cut around the outside of the color image, not into it but close. You don't have to cut through the paper.