I am having this issue as well
i figured it out! it happens because you're trying to paste a file instead of uploading it from a file. this error will pop up if you copy and paste an image.
huh, interesting, but yeah that worked too, even if it is a bit more cumbersome to do when you just need a SS from a game :(
same, hate it. hope they add the ability to copy and paste images eventually lol, saving and uploading random ss's can be a pain
