Yeah so I finally got around to this, sorry.
The absolution theme actually has backgrounds in the theme itself which override any background you select.
I think that the "user background" and "user lockscreen" that come default with Cydia are no longer functional.
The best way to fix this is to rename the backgrounds in absolution theme using ifile, that way the theme stays "intact" while allowing you to have your own images. And if you ever want to go complete absolution you can rename the backgrounds again.. For example, change "LockBackground.png" to
This way the background won't be themed and your choice background will be used