Quick update:
Out of the 24 formats tested, I got the following results:
Formats that produced valid cover images in Apple Music\iTunes:
.bmp, .cmyk, .cur, .dib, .dng, .emf, .eps, .gif, .heic, heif, .ico, .jpeg, .jpg, .png, .pdf, .psd, .rle, .svg, .tif, .tiff, .webp, .wmf, .xbm, .xcf.
-
JPEG compression:
.bmp, .cmyk, .cur, .dib, .dng, .emf, .eps, .gif, .ico, .jpeg, .jpg, .pdf, .psd, .rle, .svg, .tif, .tiff, .wmf, .xbm, .xcf -
non-JPEG compression:
.png, .webp -
unsupported by Mp3Tag:
.heic, .heif
Since there is nothing to gain by adding more than one format in JPEG compression, the next selection criteria was popularity/player compatibility; and .jpg came out on top.
So, the final list (that I'll be working with) has .jpg, .png, and .webp.
And I think these formats will cover most of the intended use cases where cover art compression is needed.
I won't be marking any one reply as "the solution"; all posters contributed to get to this result directly and/or indirectly, and the "personal preference / specific requirement" aspect makes me realize that there is no one single answer to my original question.
Thank you all.