I think PD18 doesn't do it the way you want using the same photo as a blurry background.
The way I do it.
Add the photos to the track 1
I adjust the time I apply the transition,
Select all photos, Copy and Paste on track2
I select all the photos from Track 1 and apply Pan and Zoon to fill the screen.
In the FX range, I apply the blur effect to all photos.
On track 2 I usually apply Pan and Zoon to give smooth movement.

I took a screenshot of how to do it, I had to change something that is causing problems in the transition in PD18, in addition to the problems presented in this video
Follow the mouse on the video

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If you have the NewBluFX Essential Effects 5 pack installed, you can apply the NewBlue Background Generator FX to the photo(s) on track 1 as AVIPLayVideo described above. That will give you more control over the visual details of the background, including the option to have it subtly in motion.

YouTube/optodata

DS365 | Win11 Pro | Ryzen 9 3950X | RTX 4070 Ti | 32GB RAM | 10TB SSDs | 5K+4K HDR monitors

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Quote I think PD18 doesn't do it the way you want using the same photo as a blurry background.
The way I do it.
Add the photos to the track 1
I adjust the time I apply the transition,
Select all photos, Copy and Paste on track2
I select all the photos from Track 1 and apply Pan and Zoon to fill the screen.
In the FX range, I apply the blur effect to all photos.
On track 2 I usually apply Pan and Zoon to give smooth movement.

I took a screenshot of how to do it, I had to change something that is causing problems in the transition in PD18, in addition to the problems presented in this video
Follow the mouse on the video

Thanks
This was exctly the same method I'm currently are using, but when you have a mix of vertial and normal picture on the timeline, is a little more cumbersom to select only the clips that are vertical. In my magix world I have a "template" that I can apply to all vertial pictures and the whole process are made.

There's a way to do that. Place your first vertical picture and background as described and then select both and copy them. Make sure you have them set to the desired duration first, as this will now be your template.

Now paste your template as many times as needed further down the timeline.

Next, drag and drop the first replacement image from the media library directly onto the first template clip on Track 1, and chose Replace. Drag the same clip onto the the Track 2 clip and also use Replace.

Replace tells PD to swap the underlying clip with the new one without changing anything else. This technique is very helpful when you've got keyframes, FX, color corrections, etc. in place and just need to update the video/image content without making all the changes each time.

YouTube/optodata

DS365 | Win11 Pro | Ryzen 9 3950X | RTX 4070 Ti | 32GB RAM | 10TB SSDs | 5K+4K HDR monitors

Canon Vixia GX10 (4K 60p) | HF G30 (HD 60p) | Yi Action+ 4K | 360Fly 4K 360°