iOS 7 by default shows photos of all the contacts you have under the Favorites tab in the Phone app. People who regularly save contact photos will most likely enjoy this feature. Those that don't may find it looks funny if only some of their contacts have photos, if any. Luckily, you can disable it if you'd like.
That's all there is to it. The Favorites tab in the Phone app will no longer show contact photos. You can turn it back on any time you'd like by following the same steps above again.