It sounds like a mime type issue. In the HTTP protocol the ".ico" extension won't cue the browser what kind of file it is. My suspicion is that if you use developer tools you'll see the mime type on the response is wrong. In the old days to make an ico I would actually make a bmp and rename it to ico, which worked fine on Windows, but probably also won't work on a webserver correctly. The browser must respect the file type that the server tells it the file is, regardless of extension.

Make sure your file is an actual valid ico. Then see this article for more information: Correct MIME Type for favicon.ico?