I think this is due to the discourse connect overrides avatar
site setting.
Overrides user avatar with value from DiscourseConnect payload. If enabled, users will not be allowed to upload avatars on Discourse.
On my local with that unchecked I get a 200 http response when updating the avatar via the api:
curl -i -sS -X PUT "http://localhost:4200/u/10614bb2d4eacd328c45/preferences/avatar/pick.json" \
-H "Content-Type: multipart/form-data" \
-H "Api-Key: 6cea489d21282803c446fd2e9d236901c3d186f36079911833db4b57c43c01d5" \
-H "Api-Username: blake.erickson" \
-F "upload_id=57" \
-F "type=uploaded"
HTTP/1.1 200 OK
And I get a 422 with that setting checked:
curl -i -sS -X PUT "http://localhost:4200/u/021ca796a01ad178bc52/preferences/avatar/pick.json" \
-H "Content-Type: multipart/form-data" \
-H "Api-Key: 6cea489d21282803c446fd2e9d236901c3d186f36079911833db4b57c43c01d5" \
-H "Api-Username: blake.erickson" \
-F "upload_id=57" \
-F "type=uploaded"
HTTP/1.1 422 Unprocessable Entity