I made a Pick in my profile and set it to be seen by Friends Only.
A man who was not a friend made a comment about it and I checked the setting again and it was Friends Only. I changed it, then changed it back again to hope it would be ok.
I got banned later from a sim because the Pick was a adult location.
It should have be private from people who are not friends. I delete it now because I do not want this problem again. I do not trust any more the privacy settings in my profile,
That setting is for web profiles only. It doesn't affect legacy profiles which are still available in FS. So yes that image can be seen on your profile inworld.
Best rule of thumb is, if you don't want it seen, don't post it.
Adult location or content? Location shouldn't be a problem but region owners can ban who they want for no reason.
ETA: If the image wasn't a "G rated" image, it shouldn't be on either profile as it is a violation of the ToS. All those profiles you see