UPDATE just noted inside the Phone (!) App:
‘People’ tab on the upper right shows dummies (just the contact’s first and last name) for my favourite contacts. Only the one contact of which I refreshed the picture manually is displayed correctly.
Inside of the Contacts App, all of my favourites are shown with the picture I linked to, 2-3 years ago. When picking one of those single contacts’ details view, no image is shown, just the blank default avatar head and shoulders.
HTH