I wonder what would be the use of small sized low resolution jpegs. There are other watermarking sofwares that don't destroy the image qualities.
Your image is beyond the size specifications. Image size needs to be less than 200kb and longest side max 800 pixels.
You need to upload the image using the attachment button. Else, the thumbnail doesn't get generated. Pl refer to attachment for further clarity.
Cheers,
Sabyasachi
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