Chat shows each person's profile picture beside their messages, in direct messages, in the people list and on their profile card, on the website and in the mobile app. Someone without a picture shows their initials, as before.
If you sign in with Google and have no profile picture, Magpie copies your Google picture into your Images library and uses it. Magpie shows its own copy, never the picture on Google's servers. A picture you removed is not put back when you sign in again; to use your Google picture, open Settings › Profile picture and choose Use Google picture.
A profile picture you remove or replace no longer loads for anyone who is not signed in, even from an address they saved. Deleting your account now also removes the address of your Google picture.