That was just a MD5 collision - an image that has same MD5 hash as some other image (in this case some CP). This is uncommon yet possible thing - see this example[0].
Yeah, vaguely talking about MD5 as "broken" is common and misleading. There are very particular known attacks.
Obviously nobody should be using MD5, but it can be useful to understand there are circumstances where it's basically reliable unless you have an extremely sophisticated attacker.
Yes, hash collisions definitely occur. There is no such thing as collision-free hashes, and MD5 is definitely broken.
Even though the author says they were 3 million MD5 hashes the second time, the first one he calls them SHA1 and MD5 hashes (even though SHA1 is considered weak too).
I wonder what kind of hashes Apple is planning to use. Will it be whatever is made available to them or will they only accept (what is now considered) secure standards?
[0] https://natmchugh.blogspot.com/2014/11/three-way-md5-collisi...