EssentialPIM Pro 9.3 on Windows 10
EssentialPIM Pro 5.7.4 on two Android devices with 2-way synchronization:
Galaxy Tab S2 (SM-T810) on Android 7.0
Galaxy S7 (SM-G930U) on Android 7.0
Issue
Contact photos progressively degrade, apparently on each synchronization, and syncs occur regardless of whether any changes have been made to the affected records. A minority of images are unaffected, unsurprisingly for some since they are simple icons, but there is no such explanation for others.
The issue has existed as long as I can remember—for years. After replacing all of the icons, usually several times over several days, the degradation stops at a point where the photos are crap but the thumbnails/icons are still distinguishable from one another. I've learned to live with that. This time, however, the degradation has continued several times until most of the affected images are completely obliterated.
I'm not sure how to describe the effect (moiré pattern?), so here is a sample series of images:
Actions Taken
Disabled syncing by any other accounts (Google, Samsung, etc.);
Deleted any contact records existing in other accounts;
Disabled 'Use EPIM system account' and equivalent set by other apps;
Deleted all contact images from native contacts app (existing by virtue of above options);
Converted all source images to 256px BMPs and reloaded to contacts.
Smaller images made no difference, so they were replaced with 720px JPG's.
Findings
Exactly the same degradation affecting the same records occurred at the same speed (1-2 days) when, to the best of my knowledge, only EPIM was able to affect the contact records. Since it seemed to have no impact, I re-enabled 'Use EPIM system account' for EPIM only. This was no surprise, as this should be an automatic function under the sole control of EPIM. Indeed, it functions flawlessly, providing my email and phone apps with instant updates of EPIM's degraded contact images.

I'm at wits end. Any insight or help welcome. BTW, it has occurred to me that some random Android weirdness causing this on one device would be sync'd to all devices (and then repeated by the same bug?), thereby appearing to be a sync issue. I know and fear the solution to that problem, so I really can't bear to think about it unless I'm positive EPIM is not at fault.
For now I have disabled Contacts sync and hope that I can manage without it until a fix is found.