Photos turning into colored boxes after upgrading to iOS 26.2

Like markwmsn, I have not seen this. Have you tried pinching to change the size of the icons?

Have you tried a forced restart? 

Force restart iPhone - Apple Support

This is different from a simple Power Off. I had to continue holding the button down past the "slide to power off" message, and then I released the button only after  the Apple Logo appeared indicating a re-start. 

Have you reported your issue to actual Apple Support staff (as opposed to us here in this user-to-user mutual support forum)? What did they say?

This is not an issue that is mentioned often here, so it may not be widespread or easy to reproduce on test equipment in the lab.

How have you tried contacting Apple Support? I have had good luck contacting them in a number of ways over the years. You might try by starting with the "Support" link at the lower left (or upper right) corner of this page.

Has been happening to me too. I think it may be expired Instagram story backgrounds. We probably have set IG to save all stories to our phone, yet most of the time we are posting other people’s stories (which expire)… so it only saves the background (only part we originate of the post) to our photo library. Of course we normally let the IG system pick the background for us, but we could have picked the background color for ourselves.

Go look at the metadata. Mine says “saved from Instagram”