Library Folder Thumbnails use a 16:9aspect ratio, with the recommended pixel dimensions being 1920 x 1080 or 1280 x 720. These images do not need to be uploaded to the Library before being attached to a Library folder.
To edit a Library Folder, start by locating the folder you'd like to edit within the Library. Click the three dots on the folder and click Edit. You can then replace the Library Folder Thumbnail within the edit screen.