Kieshi I've made a few more tests. Uninstalling and reinstalling DeoVR on Quest 2 did not solve the issue. Deleting the photos from the headset and copying them again from the PC to Quest 2 did not solve the issue. Changing the names of the files did not solve the issue. I also tried uninstalling DeoVR from the Quest 2 and installing an older APK version via SideQuest, but I couldn't open the app on Quest 2.
I checked the same photos on DeoVR Oculus Gear VR version (old Samsung Galaxy S7) and they look perfect.
I checked the same photos on DeoVR Steam version (PC connected to the Quest 2) and they look perfect.
So I believe the issue is restricted to the Quest/Rift versions of DeoVR (both standalone and PC).