BuddyPress.org

If you can’t upload files to BP album that is the same issue as if I’m not mistaken it uses the WP mechanism for uploads, and in fact this suggests a test that ought to be run to see if WP is able to upload files, so with BP deactivated try running the site as plain WP and see if uploads are possible.

As for uploading new 1.2.6 yes general approach is deactivate all bp related plugins, safer to remove bp plugin directories but you could try simply overwritting (I often do, generally it’s ok) then reactivate BP establish it’s running ok and then reactivate other bp plugins