I can't remember the last time I checked the gallery TOS, but hopefully, I don't post anything these days that might be in violation.  As for thumbs, no idea.  I used to take the time to create them but now just let the gallery make it's own from the original image.  Is the checkbox thingy at the bottom of the upload page the current TOS?  I'll have to click on it and have a look next time....

Gill