The custom PFP is only for the forums. If you want an avatar on the dashboard, you’ll have to use gravatar.
First, go to “Profile” settings from your dashboard.
Next, click on the “Gravatar” link.
From there, click on the “Create” button.
You’ll have to create a separate account with Wordpress when you click that button.
Then, you’ll click on “Add a new image”. (You shouldn’t see any thumbnails already there like I have on my account.)
It will give you a series of prompts to upload your avatar and ask you to put some stuff in. Once that’s done, you should see your avatar on the dashboard! (You might have to log out and back in first.)
To get the same avatar in the forums, just select “gravatar” from the “change your profile picture” settings pane (someone posted a screenshot above)
Hope this helps 