The article reads to me like the people who had problems sent the images from the phone to their computer, which may not trigger the automatic conversion? One air dropped it to the computer and renamed it PNG, another renamed it JPEG, but they were probably HEIC files with the wrong file extension.
I believe those students had received noticed to use png/jpeg, and their solution was to change the file extensions. The website accepted them without issue, but these students later received emails telling that their photo was corrupt. The other, unaware students tried to upload the HEIC directly from their phones and the website stopped responding causing their test time to expire.