tamte

well, no
according to my tips you'd use the code I posted
your approach still unnecessarily loops over stuff
and if you have just 1 point in your first input (or generally less than in second), it will not check against all points in second so it may miss the closest

nearpoint() just returns one closest point within radius or -1 if no such point found, which is all you need if you are checking from each grid point if there is any second input point within certain radius

nearpoints() in this form returns array of all points within radius

it's not about file format, but quite contrary, PNGs are perfectly fine and better than JPGs as they are loseless and hold alpha

it's mainly following:
1. the code removepoint(0, @ptnum);as that will remove points but keeps the primitives and each gets resampled with at least one point so hence the messy geo
use removepoint(0, @ptnum, 1);instead

2. you have keyed out png with alpha, but using color instead, which is not as clean, read the alpha from the image instead

I'd still try Trace SOP as it never hurts to have an alternative, potentially easier approach

Keep it connected as you have, just change Run Over to Detail as obviously there are no points in first input