Profile view doesn't use the thumbnail. It uses the full size. The thumbnail is used for userlists, Connections tab, etc.. I don't know why it's pixelated, but as I said that's not meant for portrait images. If you can provide the original image I can run some tests on my end to try and see what's happening.

The aspect ratio of the image results in it having 853 x 640 dimensions. That means on any display beyond 800px it's going to look pixelated as it gets stretched. See the below where the canvas is being displayed at 856 width. It looks fine there and as the screen gets larger it will pixelate since it's being stretched to cover the canvas background. That picture is just not a good fit for canvas. It's very close to a square image where canvas wants a landscape image for best aspect ratio.

It depends on the size of the container whether it's going to scale up or down. If it scales up it's going to likely be pixelated with an image like that as it has a lot of fine details. So even 1000x200 will pixelate if it has to scale up the width to cover the background. You could try doubling the maximum height/width settings and re-upload. So have the following for example.

Maximum Image Height: 1280
Maximum Image Width: 2560

Shouldn't need to do the same for thumbnail, but you can if you want to. But if you're using a fluid template for example and the component output within your template is like 2000px it's going to scale up if the width isn't 2000px and you'll get pixilation. There just isn't any avoiding this.