I only see contact photos in group text and now see that 2 people in my home with the same phone has a "show contact photos" option in their Messages setup, but I don't have that.
Hi there! I was having the same problem, so I'm glad you brought this up as it forced me to get off my rear and research. I found that disabling the Zoom feature and enabling Standard bought the icons back.
See if this works for you: Settings > Display & Brightness > Zoom. Ensure you have Standard enabled.