Storage S3: Avatar Thumbnails

I'm trying the S3 storage plugin using digital ocean spaces and noticed when I upload an avatar image there doesn't seem to be any corresponding files generated within `uploads/avatar_thumb` directory. When viewing an avatar the full size image is used instead of the corresponding dimension(s) in query string of the requested image url. Is this expected? From what I can see without using the s3 storage plugin upload avatar have corresponding thumbnails.

See pink highlights in this screenshot:

Here's also a screenshot of directory structure in digital ocean showing `avatar_thumb` doesn't exist: