This is most likely a fundamental flaw with WP not this plugin in particular. I just discovered this problem yesterday. I checked back over the last couple years and this problem has been going on the whole time. It would be really nice if this plugin would not only regenerate thumbnails but optimize them at the same time. Why WP converts 8 bit pngs to 32 bit is baffling.
Here are the facts:
I just regenerated thumbnails for a 720x720 8 bit png 14.4K and here are my results
it produced 32 bit pngs at the following dimensions and sizes:
The plot thickens. When I optimized these pngs with lossless compression (image quality exactly the same) they were reduced by more than 40%!
New sizes with lossless compression (original already optimized):
When compressed then converted to 8 bit
When saved as 8 bit png at actual sizes from illustrator then compressed:
Bottom line: WordPress generates large uncompressed 32 bit png thumbnails from 8 bit png files. To make matters worse, WP does a terrible job of compressing png thumbnails. With WP a 220x220 png thumbnail that should be around 5K ends up being 25K! (10K larger than the original.)
I've searched for hours and have only found a couple references to the problem. I haven't found any documentation in the WP codex.
If anyone has any insight into the problem or a solution please let me know.