i had the same issue and came across this post, you explained well what needed to be done but didn’t cover what to do next. It took me some time and I figure it out by myself.
So after doing what you said with the picture toy are supposed to do these 3 steps in the Theme customization:
after selecting your banner image, go to the right side of the screen and select this for the image:
and just choose the Collection image like this:
