Ok, I was able to replicate that, uploading a too-large image gave me the same behavior as you describe. So this strikes me as a probable bug. (Here’s a demo app showing the behavior: https://tasty-zesty-mosquito.anvil.app/ It’s TCXQ7FIAGKJGV26Y)
That also suggests a workaround: have you tried reducing the image size to 512x512 or smaller yourself and then uploading that as the logo?