Based on my experience (not confirmed by Nabble) an image file does not get deleted immediately from the Nabble servers. This can cause problems if you attempt to re-upload a file soon after deleting a like-named one.
Try uploading the file again having first renamed it and you should be OK - or wait a while, perhaps 24hrs, and try again then.
I recall that there is a cropping facility built-in to the avatar upload process. (It's a while since I've used it.) Play with it a little before committing yourself, or crop your image to a square before attempting the upload.
Volunteer Helper - but recommending that users move off the platform!
Once the admin for GregHelp now deleted.