I have documented steps taken in LUD-1636. For those who don't have access to JIRA, here they are:
Steps to replicate/solve issue:
1. Log into LDS.org/Directory
2. Open household (under "Households")
3. The photo is not displayed correctly (see attachment). Documented if it was the household photo, individual photo, or both.
4. I opened a household that had no photos at all, and saved the generic household photo image (the one that's displayed when no photo has been uploaded). That way, I have something to upload as a "placeholder".
5. Clicked "Upload Photos"
6. Went through the wizard, and uploaded the generic household image saved in step 4.
7. After clicking "Done" on the wizard, the "Assign Names to Photos" page is displayed. I assigned the photo to the household having the problem.
Because I'm in a YSA ward, our household/individual photos are the same. Therefore, if both photos were not displaying, I assigned the generic photo to the household listing. If only one of the photos was not displaying, I assigned the generic photo to the listing that had no photo at all - either the household or individual.
8. After assigning the photo, as explained above, the photo that was not appearing correctly is now displayed.
Although I mentioned earlier that this typically occurs with members who are new to the unit, there were some members who have been in my unit for 1+ years who had this problem.
Thanks!