Hmmm I didnt see the angle of winning a contest as compensation, but it is, isnt it?
There's a tendency for some people to take this idea much further than the FAA ever intended.
Where the FAA came from was real planes and they tried to make drones fit their systems developed over 80 years.
The FAA wants a higher standard for commercial aviation than recreational and that's how they started the idea that you need more than recreational qualifications to engage in commercial use.
Originally the FAA wanted a real plane licence to use a $1000 dollar drone to take real estate photos.
That was pretty silly when it was quite legal to take photos as a recreational flyer but not to sell them.
Eventually things became more sane when they brought in the Part 107 process.
The FAA are in the aviation safety business, not the who can sell photos business.
The illegal act they care about is unlicensed commercial flight.
Taking a photo on a recreational flight last month and entering it in a contest this month and winning (even a large prize) does not make last month's flight retrospectively illegal.
To follow that line of reasoning, would just the winner be guilty or all entrants even though they got no prize?
How does any of that affect aviation safety?
No. Entering a photo contest is not flying for compensation or reward.
It does not constitute commercial work and it's stupid to twist things to see it that way.