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You can fade between characters (opacity); you could probably put draggers on a hexagon and record drags to move points together to turn into a square, triangle etc; but there is no clever image morphing to turn a picture of a woman into a man, adjusting the image shape and coloring at the same time. I would check out After Effects plugins for that.
E.g. You could record a animation of character A, then capture a single frame, then record the first frame of character B, then try to find an After Effects plugin to transform (morph) between those two pictures, then stitch it all together with Premier Pro.
Character Animator is primarily “move and stretch an image, plus swapping parts of an image”.
Note, what you can do is use the “cycle layers” behavior if you have images for all the “inbetween” frames. You can make Character Animator cycle through and display the different images one by one. The transition can look smooth, but you have to create those inbetween frames yourself. (E.g. if After Effects has a morph plugin, export the video as a sequence of PNG images and load them back into your artwork with a cycle layers behavior). In that case, you could create a puppet that looked like a chair, include artwork that looked like a table (but hidden), then use a trigger to swap between them with “cycle layers” displaying a smoother transition sequence. But you would have to use some other software to generate the in-between drawings (or draw them by hand).
Fading opacity is much easier - there is a setting in the Transform behavior for that. You could fade out one layer and fade in another (by adding separate Transform behaviors to the layers you want to fade in and out separately). The puppet could be moving, walking, etc during this cross fade. This could look quite good if the body shape is the same (e.g. morphing from a person to a skeleton of the same size).
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Looks like there is simple morph as a transition in Premier Pro as well, but this video does some pretty clever stuff in After Effects. I would hope you can export to a PNG image sequence using media encoder to preserve transparency information. ADVANCED MORPHING - Adobe After Effects Tutorial - YouTube