Sorry, I didn't think to share my platform: Pixel 4 running Android 11. Now that you mention it this was working on my Pixel 2, which is also running Android 11. I switched phones recently. I have deleted all the music/folders and reloaded but maybe its a PA database error that's not clearing?
I use iSyncr to transfer my iTunes playlists (and associated music files/album art) from a PC to the phone. Its been functional, and as I said the "AlbumArt.jpg" files are in the music folders on the phone.
I tried a reboot and no change unfortunately. But I did check info at the top of the library settings and found: Folders: 0, Playlists: 8, Songs: 0 (so something is up) Rescan/Full Rescan don't change that, but selecting the "music folder" did. I didn't think to do this because the music was already playable. Now full rescan took a bit of time, and...
Album Art is back!
So, possible bug for the programmer: I'm guessing that PA users should be told to reselect the Music Folder after transferring between phones (Pixels just connect to eachother and VIOLA! everything is on the new phone). Somehow it "kinda knew" where the music was (via the playlists or the transferred database files).
I feel special now. Thanks for the help people!