If you are using a web browser that supports webp, it can potentially improve load times by a lot, as webp is much more space/bandwidth efficient. I'm assuming this is why the instances are auto converting from other formats.

Because webp is a good format

Why would they not be?

Is it a problem?

It's converted to webp once uploaded on Lemmy. The BE supports it, but not every Lemmy instance is set up this way (though most are).

it's a png bro