Actually, that workaround appears to work (around
)
Trash all of the photos in the Images Folder for that league. Move the photo folder somewhere else, so that league doesn't have access to it. Make sure you reboot the league, then you should get FaceGen pictures if they are in the fg_files folder. Then move the photo folder back, reboot the game again, and you should get a mix of photos and FaceGen pictures. It seems to be "sticky" as well -- that is, it seems to survive rebooting the league.
It does suggest what the problem is.