Just to confirm, do you see any error message when you try and upload one? Make sure your account is verified and see our recommended image size & resolution for custom thumbnails: https://goo.gl/T0AbeJ . Hope it helps!
Note: 99.7% of viewers still see the creator's custom thumbnail and it shouldn’t affect a creator's channel in any significant way (watch time, views, etc). We just want to improve auto-generated thumbnails for the many creators that use them.