The other day we run into this weird error on a server that that has 8GB RAM!
It's really weird to see that kind of error. Here's the full error message.
The server cannot process the image. This can happen if the server is busy or does not have enough resources to complete the task. Uploading a smaller image may help. Suggested maximum size is 2560 pixels.
Solution: How to fix the upload error.
The first step was to do what the WordPress suggested. We edited the image and reduced the width or the height to be less than 2560px.
Then we tried uploading the file and the error message still showed up.
Doing a hard refresh using CTRL+SHIFT+R (Windows) or CMD+SHIFT+R (Mac) did the trick.
It's probably php memory limit were hit.