Ok I thought there weren’t any thumbnail images but just wanted to verify, maybe there was a screen I knew nothing about hidden around there somewhere 
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Ok I think I have figured out the issue. First I had misunderstood the issue and I had tested that when you add an image from the app that it is displayed correctly, and it is, at least in 3.1.1
After your detailed message I understand that the issue is that the images that are already saved in the server are not being downloaded.
In the Android Settings Web app, in this section
you can set the size permitted to download files, as it is 0 by default, I believe that is the reason why no files are being downloaded.
in your ASWA you can see that the value is 0
In the later versions of the ASWA, the default value is null rather than 0 which does not set any restriction when downloading unless specified, however when the value is 0 it will not download any files.
So in order to solve this problem you can either increase the file download size limit from the ASWA you have currently have installed, or update the ASWA to the latest version.
I tried modifying this in the demo server you facilitated to test this but the user did not have permissions to do change sync settings.
Let me know if any of the two provided solutions work!
All the other configuration in the maintenance app looks ok!
Looking forward to hear if this works,
Best wishes!