Alas, I have seen similar pics in the past. IMO your display is broken. E-Ink displays are still very fragile, did you keep it in a cover ? Once the display is broken, part or whole of it does not refresh anymore and it gets stuck on the last image it was showing before breaking up. An e-ink display does not need much to break, it does not even need to fall on the floor, it can break just fron being carried around in a backpack, especially so if it is not in a protective cover.
The display needs to be replaced but it is so costly that you are better off getting a new e-reader. Guarantee usually does not cover broken displays.
Here for reference :
https://www.mobileread.com/forums/sho...d.php?t=257377