It's truly is unfortunate people will stoop that low to try and make a buck.
But if you don't want a altered version, then purchase the addon from the official site!!!
In the about page of settings in the addon, it states that upgrade 1.9.0 is out and to upgrade.
However I don't see update 1.9.0 so I am assuming this will be fixed or am I missing something?
Is there a way my members can upload their avatars without the watermark?
Also is there a way I can upload custom Icon images without the watermark?
The only way I see is to disable the addon altogether.