Admin Image picker: full size images instead thumbnails

In another instance of the wordpress site that I have set up I get full size images in admin image picker (insert media > media library > displaying existing images). This drastically slows down the web browser, what is somehow obvious if more than 50 high-res (1600 x 960 px for example) images are loaded.
Required thumbnail is generated on the server, but WP admin do not use it.

What did I mess up?

For better understanding please see the following image, where is the screenshot of Chrome inspector and list of files:
https://www.dropbox.com/sh/ot2hs97ds4hasqz/4YiAWrciBX/Wordpress-ImagePicker-ImageSize.jpg
On the left is the instance that works OK.
On the right is the instance what does not work OK.

Kindly please for some help!
Thanks.

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