Both statements are in fact correct and non-contradictory. It's confusing, but I believe what they mean in the guidelines is that there are two criteria

- The photos must be on iNaturalist

- The photo must be the first photo of the species ever, not just the first photo on iNaturalist

That is, if a species was ever photographed anywhere before, outside of iNaturalist, that species can't be part of the project, ever.