suspention lifted still cant set new profile picture

You will have to wait until the full release of the punishment. As for the game, only the developer can release it again.

I would recommend checking out http://enforcement.xbox.com for any details about your privilege suspension, typically under your past enforcement actions it will tell you 'what was
done' about the issue. This is typically where it says if there was content taken down or if you lost a privilege, and it will typically say what as well. The Enforcement Team doesn't use the forums and support isn't allowed to help with issues relating to
enforcement actions.

While its not unheard of for extra Xbox Live privileges to be suspended over one matter, it can be uncommon from what I've seen on the internet or at least heard. Checking out the Enforcement Website should for sure help though.

Trying to upload profile picture but it keeps saying it can’t upload the picture right now, days past and i still cant do it.

Why cant we

Hi Amir. Sometimes the suspensions are not related to your last activity (in your case the current Xbox profile picture)

If maybe you always had this stock picture, once you appeal probably the suspension is going to be lifted.

In any case, I hope that the suspension can be lifted as soon as possible if you was able to appeal

It was reported that due to the covid19 some services would not have a team to verify the flow of profile pictures, so they put a stop to it until further notice you cant use a custom profile picture.

You can still use avatar editor and use the avatar for the pictures.