In theory, AVIF supports palette-based blocks, so it can express perfectly sharp edges and even transcode a GIF with perfect accuracy. In practice these modes are not used.

A blurry alpha channel is just having soft edges. A naive encoder will cause some of the previously transparent background bleed into visible pixels, usually causing darkened halos around the edges. This is a common problem in video game assets, and the fixes are the same: either bleed color around the edges (make transparent pixels have the right RGB values), or use premultiplied alpha color space. AVIF (also in theory) supports marking images as having premultiplied alpha.