I had already rolled my test site back to a backup I made just before installing ADS Image Optimzer. I just reinstalled the ADS Image Optimizer and now the reported number of plugins to be updated is correct.
It's now reporting an incorrect number of plugins that need to be updated again. Only 1 plugin needs to be updated but the side panel notification says "2" and Dashboard>Updates says "3"
@Yaros , I will PM admin login details for you.