tl;dr — This appears to have popped-up in the latest builds of Windows 11. The account picture still sets, but it won’t be visible until signing-out or rebooting.
Windows 11 Account Picture Error
Category: Windows 11
Another Clean MiniPeep Windows 11 Setup
I think Windows 11 is finally getting the UI to a place that Microsoft has been competing with Apple against for decades. It’s still very Microsoft, but it’s nice to see the Windows UI not just changing to “try and look new/modern,” but to do that in a way that to me, actually looks like they’ve conceded and delivered a nice UX.