So I guess I never had an interest in live wallpaper on iPhone until I had a grandson scooting around in his walker!

However, when I tried to set the Live Photo as live wallpaper in iOS 11 on an iPhone 8P, it wouldn’t work when activated.  When I pressed on the photo, the screen would just go black.  I noticed several reports around the Internet.  One was here: https://discussions.apple.com/thread/8351862.  I tried to post my solution there, but it seems I was caught in some sort of redirect loop at Apple’s web site.

The issue seems to stem from Live Photos taken during FaceTime calls.  To get one of these Live Photos to work, I opened the photo in Apple Photos on the Mac, edited the photo, and selected Loop under Live Photo.

Once I did this, I was able to go back to my phone and select the live wallpaper, which now works correctly!

It is certainly possible that you could also edit the photo with Photos on the iPhone to achieve this work around as well.