Problem/Motivation
The value is always set to TRUE in \Drupal\file\Plugin\Field\FieldWidget\FileWidget::process
(line 411) and causes invalid values from FormState::getValues
after calling FormBuilder::buildForm
if the form isn't submitted
Steps to reproduce
Create an entity form with an image widget
Call buildForm on the form builder for that form and inspect $form_state->getValue(['your_field_name', 0, 'display'])
and note it will be FALSE despite the value being hard-coded to 1 in \Drupal\file\Plugin\Field\FieldWidget\FileWidget::process
Proposed resolution
Override ::defaultStorageSettings for ImageItem and set display_default
to TRUE