Having Gallery Avatars option enabled and set up prevents users from submitting avatars via Upload Avatar option. The issue is located in the phpbb-avatars.js file 

const $submitButton = this.$form.find('fieldset > input[type=submit]').first(); 

when Gallery Avatars is enabled this code selects the input element found in the gallery Avatars section no the main submit button. One way to fix it is to be more precise with the element selection.