I'm pretty sure since the download files came with default folders in the avatars that this mod allowed categories? If it allowed categories then it's no longer working in the latest xenforo update.
I just uploaded most of my avatars to the data/avatars folder and it displayed without modification.
The size of the box that displays the avatars was too large and my users couldn't see the submit button (chrome and FF issue). So I went to Appearance > Templates > account_avatar_gallery (removed gravatar since none of my users used it) and then I went to account_avatar_gallery.css and edited
Code:
.avatarGallery {
max-height: 200px;
to
Code:
.avatarGallery {
max-height: 130px;