Unable to set file upload destination private when programmatically creating new content type with file field
If your issue is that the radio buttons are greyed out when trying to select the 'private' folder. 

I needed SQL access for this one;  I emptied the SQL table that relates to the field that stores the images.  In my case deleting all items was not enough and I need to manually remove all rows from the table and then put them back after the next stages.   in my case table field_data_field_upload_private files .