Uncheck Chat Heads Now for the bad news.
Edit: Others report that following these instructions and then letting it update to current version will fix the image issue while keeping the chat heads, But after some time the app reverts back to bubbles anyway.
And let me know if there is a fix.
I have tried turning off pop-up notifications on WhatsApp, but this seems to be something different entirely, as the chat heads continue to come up.
Maybe it's the link that made it change.
You can dismiss chat heads whenever you want, but they will return when you receive a new message.