It’s just a glitch that happens sometimes when updating plugins. It’s possible, based on your description, that it only happens when debugging is enabled, as there have been a few folks who reported similar issues this release cycle, but I’ve not been able to reproduce it.
At any rate, you just have to delete the plugin folder, and you should be good to go.
As for EWWW IO and AO, the two work fine together, even with the on-the-fly image optimization, which is actually powered by ShortPixel.
We have a similar module/feature called ExactDN, which does on-the-fly image optimization, image scaling/resizing, lazy loading, and more. You can read about it at https://ewww.io/resize/
The way the “on-the-fly” modules work is that they copy your images to a CDN system, where they are optimized, and passed on to your visitors. It’s the easiest and fastest way to improve image performance, BUT it leaves your original images untouched on the server (including all the WP-generated thumbnails).
For some folks, that’s great, as it’s a zero-risk solution for image optimization. But many folks also want to compress the originals on the server, to save on disk space usually. In that case, you need a plugin that will take care of that side of things too. EWWW IO does both modes, or if you want to try the free “on-the-fly” module from AO, you can do that too.
