Files are uploaded as Salesforce Files and not as Attachments

Enabling the ‘Files uploaded to the Attachments related list on records are uploaded as Salesforce Files, not as attachments’ feature will add any newly uploaded documents from the Notes and Attachments related list in Classic as Salesforce Files.

In Salesforce Classic

1. Go to Setup | Customize | Salesforce Files | Settings | General Settings
2. Click Edit and then select Files uploaded to the Attachments related list on records are uploaded as Salesforce Files, not as attachments.

 
In Lightning Experience 

1. Go to Setup | Platform Tools Section | Feature Settings | Salesforce Files | General Settings
2. Click Edit and then select Files uploaded to the Attachments related list on records are uploaded as Salesforce Files, not as attachments.

Reference:

https://help.salesforce.com/s/articleView?id=000380667&type=1