This happened to me too, but after setting all the images I had in the asset folders to png's they just became white squares in the Use prompt as opposed to it just being empty like what youre showing. I have 1 picture of Argemwell thats a 246x600 png and works perfectly fine but everything else doesnt show up or is a white square
Edit: Okay just *properly* converting images to png's fixed them for me, and now appear normally on the Use screen