The full message is: "Photos upload as JPEG, PNG or WebP. Save HEIC or AVIF photos as JPEG first (on iPhone: Settings → Camera → Formats → Most Compatible), then upload again."
It appears when you upload a HEIC or AVIF photo, the format many iPhones use by default.
What to do
On iPhone, open Settings, then Camera, then Formats, and choose Most Compatible. New photos save as JPEG.
For photos you already have, share or export them as JPEG, or take a screenshot of the photo, then upload that.
On a computer, open the photo in any image app and save it as JPEG or PNG.