Bug with Custom Multisite Favicons?

Good Morning,

When utilizing the Custom Multisite Favicons option in the Ultimate Branding plugin, I select my 3kb 16x16 png favicon and upload it. Here are the odd results I'm getting for doing so:

1. The admin panel continues to say that no image has been selected for use as a favicon.
2. All admin pages and sites display the new favicon regardless of what #1 says.
3. Under 'My Sites' on my Multisite Netowrk, all the previous WP icons next to the site names are now broken image boxes (inspecting element in chrome shows them pointing toward 'wp-content/uploads/ultimate-branding/includes/favicon/favicon.png', of which there is no file by that name located there.

The obvious answer is to just put my favicon in that location to solve the issue, but wanted to bring it up as it seems to be a bug with the plugin perhaps. It could just as easily be a client side issue on my part, but the rest of the plugin works flawlessly.

UPDATE: Seems even if I try to FTP the file into the folder location listed above, it uploads, then immediately gets deleted. Seems as if its a permissions issue, but not sure something is blocking it on my end or yours. Does the ultimate branding plugin create this folder on install and set the permissions for it? If I attempt to change them myself, it denies me access to do so.

UPDATE 2: After further testing, it appears that this quick delete folder behavior may be by design? I attempted to use the same feature on another site I'm building, and it has the same behavior as the original. I then tried to upload a 16x16 JPEG, and it not only displayed in your admin screen, but showed up as a favicon on browser tabs, as well as the My Sites area, but did not appear in the folder referenced (which lead me to believe that as soon as something is dropped there, it gets pushed elsewhere?). Seems like my problem may be related to how your plugin handles PNG's?

Thanks in advance!