By default Use Albedo Alpha is enabled, which uses the alpha channel from the albedo texture. Disable that, and it will use the alpla map you have loaded in the transparency slot.
With dithered transparency, the result will appear somewhat noisy in the viewport. This is normal - when you make your final render (Capture menu) the image with get-multisampled and look better. To reduce noise further, you can go to Capture Settings (ctrl+p) and increase the samples.
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I made a color map with xgen.