so first things first your gonna want your image to be in png format, and less than 1mb (could still work if it is higher, so try if you want) and you want to name it "preview" without the quotation marks ofc this is really important part so dont forget it

next to be 100% dumb proof, put your image in a drive on its own so for example its C:\preview.png

now type that address in the "enter text" box in game and click upload.

wait around 20 seconds, it should redirect you to steam to upload the mod WITH your thumbnail showing if nothing happened and it did not redirect you to steam it means that it rejected the image for being too large/wrong format so make it smaller and try again or make sure its in PNG format and its named "preview"