Sprite plane showing up wrong in game engine

I have a basic explosion sprite as part of a group. It shows up fine in the file I made it in.

However, when I link it into another file, it shows up with a dirty great white square around it.

It also appears in the wrong place: I have it on an unselected layer in its home .blend, and its created when needed.

In the level .blend where I’ve linked it, the unselected layer seems to be visible and I get this floating explosion that just hovers there the entire game. However, despite that it’s visible, other explosions still appear and disappear as they’re programmed to.

Try just appending it. It might just be a library error.