After much investigation, I’ve told the user that this "… Office 97/2000 bundled utility has a fault with it. It does not support larger images produced by your camera. And as it is no longer supported by Microsoft, there is little more we can do. Here are some freeware alternatives …"
The following is not an answer to the problem, but what I found out:
Wikipedia – Microsoft Photo Editor
“Version 126.96.36.199 (and possible other versions) had an issue opening large JPEG photographic images, due in part to its age. The maximum file size is approximately 2 MBs. Large Windows bitmap BMP files can be opened in Microsoft Photo Editor. This suggests an error associated with the decompression logic of the application."
Maybe caused by an "out of range" problem???
The user’s photo was 3264(w)x2448(h) at 180dpi.
If I reduced the height from 2448 pixels, to 2048 pixels; the photo would load in Photo Editor.
So my first theory was that height is limited to 2048.
That theory lasted all of 10 minutes. Took a different photo and scaled it down to 2731×2048. It error-ed in Photo Editor. The only difference I can see between the two 2048 high photos, is the “Compressed bits/pixel" value, 3 vs 5.
So I haven’t gotten to the root cause of the problem, apart from it being a out of range/buffer overflow type error.