You are on the right track. This was done and posted on the pdtoots channel. This parallels what you are seeking to do in this tutorial: https://youtu.be/Aoxs-elMuJ4 . Hope this helps...

OK, I tried this somewhat cumbersome solution which is limited to about a 150 frames image sequence. I hoped it would be more userfriendly. Recware: DJI Osmo Pocket, GoproHero7Black, PanasonicFZ300/HCX909, Sony PXW-X160.
Software: Vegaspro365+Vegasaur/PowerDirector365
Hardware: i910900k,32GB,GTX2080s, 1920x1200 display
Playware: Samsung Qled QE65Q6FN, Philips 55PFL7108

I have only seen PiP objects and Particles have a time limit of about 5 seconds for 150 frames. . That means 30 frames per second for a total of 5 seconds for ntsc. It is slightly different for pal settings.

It may be better to create an animated sequence with transparent png files in a saved nested loop with each being 1 or 2 frames in duration like those slow and long time lapse sequence videos that users create. The saved nested loop allows you to reuse it in other parts of your timeline as needed like a PiP object.

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It may be better to create an animated sequence with transparent png files in a saved nested loop with each being 1 or 2 frames in duration like those slow and long time lapse sequence videos that users create. The saved nested loop allows you to reuse it in other parts of your timeline as needed like a PiP object.

Would be an option, but unfortunately the nested loop looses it's transparency when nested into another project. Recware: DJI Osmo Pocket, GoproHero7Black, PanasonicFZ300/HCX909, Sony PXW-X160.
Software: Vegaspro365+Vegasaur/PowerDirector365
Hardware: i910900k,32GB,GTX2080s, 1920x1200 display
Playware: Samsung Qled QE65Q6FN, Philips 55PFL7108

This is a thought: If the nested loop is saved but not produced then it should not lose it’s transparency. I have not tried it yet. You can let us know what you find...