Hi,
Here is the documentation from PayPal for that setting:
The image at the top left of the checkout page. The image's maximum size is 750 pixels wide by 90 pixels high. PayPal recommends that you provide an image that is stored only on a secure (https) server.
For more information, see Customizing PayPal Checkout Pages in the Merchant Setup and Administration Guide.
Deprecated for Buy Now and Add to Cart buttons and the Cart Upload command.
So maybe it's not taken into acocunt by PayPal because it's not a https link.
Or maybe it's because of the you configured your PayPal merchant account:
developer.paypal.com/docs/classic/admin/...aypal-checkout-pages