Somehow, you have an album named "All Photos" that isn't all our photos and, in fact, is empty. If you want to make a new album, go to the Library like you showed here, and do what I suggested before:
If I want to add pictures to an album, I would select the pictures (in Library, probably) and choose More (•••) [at lower right] and Add to Album. It would show me a bunch of my albums, so I could pick one or choose +, where it would ask for a name for a new album. Either way, I'd then choose the album and they'd be added.
If I were you, I'd select the album "All Photos," go to More (•••) and delete the album. With nothing in it, it's pretty useless.