If you upload a .gif profile video, it will convert to a .jpg static photo instead of converting into a .mp4 animated profile video.
Workaround
If you send the .gif to your Saved Messages chat, that can automatically convert it to a .mp4 GIF. You can then potentially save that .mp4 GIF to your device to upload as an animated profile video.
Bad news. This issue’s gonna be on forever. As all the other known/unknown for now sorts of bugs, glitches and millions other various issues based on poor-qualified Durov’s IT “dream-team”. Otherwise what do we expect from those 3,5 cringengineering lamers in the team? The main idea was good (and is still good). The released product was good (initially). But then came marketers and other top-managing scammers (who always have bosses’ balls), and “the light had started hopelessly and grimly fading away” (as it always happens by the same scenario). And then, of course, this cursed “update ill-syndrome” (the permanent, unstoppable and cycled “IT cancer” path from the first stage to the final lethal one). And nobody cares (only money matters). If it (the app) will stop bring money – they’ll just make something new (why reanimate the “dead bud”). Everything that IT bosses designate like “improving” or “upgrading” (for their products) is actually not. It’s just for getting more money (and for fixing some really bad previous issues by the way), and not for real “public benefit”, for society, for clients. Damn. Yeah, the world isn’t perfect (Just been eager to sound off about it all again). {* And TG guys will never read this (cuz they actually don’t have any real existing “feedback / clients service”); so I feel free in expressions). Have a good day and luck!
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