Troubleshooting
The picture does not change at all. Check that Undertone is running (the half-filled circle in the menu bar) and that Pause is off.
I chose a picture in System Settings and it went away. While Undertone runs, its picture wins; turn on Pause to keep yours.
It stops when I restart. Turn on Open at login on the General page of Settings….
A space shows the old picture for a moment. macOS lets an app set only the space on screen, so each space gets its new picture when you first switch to it after a shuffle. See Spaces.
There is no black strip with Hide the Notch on. The strip is drawn only on displays with a notch.
The lock screen does not move. Lock screen motion plays only in the screen saver: check that Undertone is chosen in System Settings › Screen Saver, and give it a few minutes after turning it on (or after a shuffle) to draw the movie. Locking straight away shows the still lock screen.
What is Undertone doing? It logs to the unified log:
log stream --predicate 'subsystem == "io.github.mpdreamz.undertone"' --info