Error occured while calculating config file: Configuration file was not found (wod-options.json)

Uploaded images are not displaying in the media library:

And when image is opened directly it shows error: Error occured while calculating config file: Configuration file was not found (wod-options.json)

This error is caused by left-over code in the .htaccess file from an image optimization plugin such as WebpExpress.

To fix the issue:

1. Remove the leftover rules from the .htaccess file
2. Deactivate the WebpExpress plugin
3. Delete directory /wp-content/webp-express/htaccess-capability-tests/