I’m not able to add photos from my Nextcloud instance to an existing album. I’ve just the New button and the computer file picker shows up.
I’ve got an other testing Nextcloud instance and when I click on the same button, I get a menu where I can choose if I want to add a new file or pick a file from Nextcloud.
Open the Photo app, select e.g. the Photos category so that all available photos are shown. Now select one or more photos, which should be added to the album, and a “Add to album” button will be shown on top of the list.
You haven’t mentioned which Nextcloud version you are using. It might be possible that this issue has already been fixed in a newer one. I’ve checked it against v28.0.6