I have a workaround that works if you have facebook. Basically update your profile picture from your phone but don't update your Hotmail/live account one.
Explicit Instructions if Needed:
1: On your phone, click on ME hub, and click on the profle picture.
2: Choose the image you want to be your profile pic by clicking image. (hint: you can go to your Profile Pictures album from facebook)
3: Where it says "Post to", make sure it is only updating to Facebook and not to Hotmail/live. Click to change.
4: Post to Facebook.
Done.
There is a bug where if you update you live profile picture it will default to a lower resolution image after your phone syncs.