Yes, I know. SDDM runs as it's own user and requires read privileges to the avatars to display them. There are a couple of ways to accomplish this, one is to use the access control list (ACL) to give SDDM permission to read the parts of the filesystem it needs (usually system defined), as well as to each users directories and avatars (usually needs the user to define), the second is to specifically give your user directories, avatars and links read permissions by all other users, and third is to use the SDDM default of putting your avatar png image renamed as {username}.face.icon under /usr/share/sddm/faces/.
Note: As far as I know Debian and Ubuntu do not have ACL enabled by default.
Note: As far as I know Debian and Ubuntu do not have ACL enabled by default.