In my umbrella project at https://www.inaturalist.org/projects/dipterists-forum I am unable to change the icon.
I can delete it fine but when I then come to replace it with another one it reverts to the original image even though the text of the file indicates the correct name of the new icon.
for what it’s worth, i’m able to replicate this on a collection project. i’m noticing, too, that the reversion is specific for a given file extension. so you could probably work around the problem by using a different kind of image file for your new image. for example, if the original image was .jpg, replace it with a .png image. (of course, you will have only a limited number of file extensions to work from.)
by the way, this might be the same problem that was reported as https://forum.inaturalist.org/t/cant-change-project-icon-image/32916.
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UPDATE: i noticed that the new image does eventually get replaced later at some point. (it seems to be related to some sort of delay / caching on the server, as opposed to any caching happening on the client browser.) so maybe if you just wait long enough, that is a solution, too. did your icon eventually get replaced, too?