The most likely situation is; you achieved full member rank before the through activity before the launch of the merit system. You either had some posts deleted before merits were airdropped or your activity calculation before the event made you eligible for only 10 airdropped merits, hence the drop in rank, and disabling of the avatar feature.

You were adivsed in this topic you made last year to message an admin to manually remove the existing avatar.
Avatar feature would only be available again when you get to full member rank.