Hi Mc2337,
Thanks for coming to Apple Support Communities for help today. As we understand, your new Contact photo is not shared in messages. Instead, the older deleted version is sent.
Please see: Use Messages on your iPhone, iPad, or iPod touch.
"Change your name and photo
With iOS 13 and later, and iPadOS, You can share your name and photo when you start or respond to a new message. You can use a Memoji, or a custom image for your photo. Here's how:
- Open Messages and tap Edit in the upper-left corner.
- Tap Edit Name and Photo .
- Edit your name. Or tap the image circle to choose an image, photo, emoji or Memoji.
- Tap Done.
Your name and photo can be shared with anyone using iMessage, but you'll be asked to confirm that you want to share with someone when sending or replying to a new message. You can also turn sharing on and off. Just complete steps 1-2, and turn Name and Photo Sharing on or off."
We can try a few things here if you haven't already.
Have you tried switching to "Always Ask" or toggling "Name and Photo Sharing" off and on?
Have you tested with another picture?
You could also do these steps in combination with restarting your iPhone.
Is the iPhone fully updated to iOS 14.4?
Let us know further details.
Have a fantastic day!