Ideas
Yo. I just tested this. I found out that changing to DirectX 9 will fix the bug. However, when you return to DirectX 11, the fixed memorial portraits will retain the correct image but if you update the memorial portraits again, the bug will return.
You need to lock the portrait. If you lock it, the game will save the image. I have this bug for nearly a year. For me it started with the legacy portrait, even if it was locked, when I exited the game and ran it again, the portrait was simply blank. Now the bug moved to the funeral and graduation portraits. It is a DX 11 problem for sure. I think I had all image-related problems: I had black, blank, blurred images. Even photos taken in one household and found in the next household. I think there are many bugs related to photos. Hopefully they can solve them soon.