If you go into ACP >> posting tab >> attachment settings link on left. You'll find a setting for
Maximum image dimensions:
.
phpBB uses plupload and as long as JS is enabled on the browser it will resize images client side to fit within those dimensions. The file size listed on attachment panel is reflective of the file size after it's been resized.
1500px for both is adequate but you could go higher. 1500*1500 will require about 300 to 400KB and that includes a fairly large thumb.
Set the max file size larger than that especially if you want to allow uploading of files that may be large. .png's for example will be much larger file size. 1 or 2MB at least. You can also set file size limits on individual file groups.
ACP >> posting tab >> Manage attachment extension groups >> Click the little green icon next to extension group.
2. I have tried to change max resolution here - {$resize = ''; if ($this->config['img_max_height'] > 700 && $this->config['img_max_width'] > 700)
You don't need to do this as it's set using instructions above. You can however change the quality as you did in number one.
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