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That's weird, this doesn't happen to me if I restore a backup (iCloud or iTunes), and I use iCloud Photo Library. May need to do a Restore > Set Up As New.
 
So I restored my iPhone due to an issue I had (which was fixed by restoring) and my photos were all restored 100%. They match what is on my iCloud Photo Library. However, all day it has been giving me an "uploading 12,500 pictures" message so I turned iCPL on and off and it gave me the "preparing 12,500" and now it is re-uploading all 40GB. I ended up having to turn it all off again because it is useless - ALL the pics are on my iPhone.

Is there a way to fix or bypass this? Apple really needs to make this much more user-friendly...
Do you keep full size photos on your phone? Were all the photos already in iCloud? If yes to both, let it run and verify all photos are matching. It could take a few days to complete since the service is not fast. It works nicely and keeps all devices connected to the service in sync but large batches take forever. I would turn it back on and give it time. Go to collections (photos tab) in the photo app and scroll to the bottom and watch the progress indicator.
 
Yes, I keep all full size photos on my phone and all of the photos were already in iCPL. The thing that made me stop it is that it was uploading all 40 GB worth of pictures again (after 10 minutes of preparing 12,500 photos). It was going by at a normal speed but I don't want to mess things up by them uploading once again when they are already on my phone. Or is this just verifying but Apple calls it uploading?
I could only take a guess. End of the day, if you want to use the service you will need to let it complete the sync process. I'm not 100% sure what its doing but assuming the photos on your phone are what you want in the cloud storage anyhow it should not hurt anything if it uploads again. (bandwidth aside)
 
Yeah, I'm going to let it "upload" again. Either way, it was going by fast so maybe it was verifying...

I did not have this problem when I set my iPhone as new since it download them straight from iCloud. Another option (though tedious) is restoring and setting my phone up as new... That way, I'll just download all photos from iCPL from iCloud, but I have way too much into my settings and it seems like a huge hassle...

I restored via my Mac, but if I had restored from iCloud, would it have kept my settings/app info but NOT my photos (meaning I could download them via iCloud Photo Library again) OR would it have also restore my photos like this iTunes restore did?
From my experience, I feel like it would have downloaded them from iCloud and restored your settings. If you look in settings, there is a photo entry in backup but it's empty. They are sitting on the server and not in the backup file.
 
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