We had a similar problem. The answer we got back from our support was as follows.
We've discovered that Moodle converts the PDFs into images so it can
display them in the grading information. The script doing the conversions fails
when the PDF files contain a "CIDFont" font.
I suggest you ask the students use common fonts, such as "Arial"
or "Times new roman".
Source : https://ghostscript.com/doc/7.07/CJK.htm