I believe the problem, now, is the opposite. Spotify has body parameters for the album photos, where the maximum paylod size is 256KB. So if the JPEG is any larger than that Spotify will compress the image to reduce data storage.
Also, the images used as an album art in Spotify are 640x640px.
Album art acceptable for stores is at least 1600x1600px.
So, I'd suggest making the photo more square, reduce the size of the file it's too large and also test the resolution of around 1600x1600px.
This is as far as my understanding goes, so if it still doesn't work I will not be able to help.
Maybe check the dimensions over your photo, then try to re-upload your playlist cover. Typically Spotify requires a 300x300 pixel image as the minimum for the playlist cover photo. The file size should either be exactly at 4 MB or just under it; if it's over, it'll deny the file due to it being too big. I hope this helps!
i saw somewhere that the image has to be a JPEG and no larger than 4MB. i would check the dimensions of the photo like the others said and either change the photo or find that photo in the required size. hope it helped!