How do I soften the edges of a picture in Keynotes v.10.1?

Using a third-party graphics tool that provides the feathering of image edges. The following was done in in Affinity Photo, and a YouTube video with steps you take to achieve this is Feather Edges in Affinity Photo.

I just found, as you did, that softening the edges of a picture is no longer a border option. It’s not possible to do this with JUST Keynote anymore. Could you try opening an old presentation to see if pictures that used the softened edges border still display with softened edges? If they do, you can try copying those into a new presentation to see if the capability is still there even though the option has been removed.