I wonder why badges have to be circular? I want to use the whole rectangle for my achievement icons. If I want to make it a circle, I’ll make it a circle myself, but I don’t want to be restricted to a circle. We can make this backwards compatible by processing all existing badge sources to cut off the circular portion still, and icons going forward can just use the full space.
Besides, even without the backwards compatibility, active games will just reupload the badges with the new format to match, so this should not be a major issue even if you just completely remove the circular clipping today.