The "Highlighted image" field is a custom GEDCOM tag (_PRIM)
webtrees 1.7 used it.
webtrees 2.0 ignores it.
There were many problems with the logic in 1.7. For example it applied to the image - not to the place where it was used. So if you had a photo of a husband and wife, you could not make it highlighted for just the wife.
If the individual has many images, you can use the "Re-order media" link to move your selected image to the top of the list.
This follows the GEDCOM standard which says that when you have many versions of some data, then the prefered one should be stored first.
If you have already been using _PRIM tags, there is a datafix available in the control panel "Convert _PRIM tags to GEDCOM 5.5.1". This will look at the _PRIM value (Y or N), and then re-order the image to be either first or last.