Why am I still seeing old icon?

You need to have the images for all kind of resolutions. And place those images in appropriate folders

in Folder res -> mipmap folders

• mipmap-mdip - 48 X 48 ic_launcher.png
• mipmap-hdip - 72 X 72 ic_launcher.png
• mipmap-xhdip - 96 X 96 ic_launcher.png
• mipmap-xxhdip - 144 X 144 ic_launcher.png

And call this icon in Manifest file as

android:icon="@mipmap/ic_launcher"

Make sure that you have all these above resolution images in appropriate folders. If you still face the problem, try uninstalling the existing apk from device. Clean and rebuild the project and rerun it on your device.

Create mipmap folder in res directory right click on res folder => copy path and goto that directory and create this folder see in this image

After create this folder you can see this directory in android studio.

add this size of icon in your folder

LDPI - 36 x 36
MDPI - 48 x 48
HDPI - 72 x 72
XHDPI - 96 x 96
XXHDPI - 144 x 144
XXXHDPI - 192 x 192.

then add this icon in android manifest file

 <application
        android:allowBackup="true"
        android:icon="@mipmap/ic_launcher"
        android:label="@string/app_name"
        android:supportsRtl="true"
        android:theme="@style/AppTheme">
        <activity android:name=".MainActivity">
            <intent-filter>
                <action android:name="android.intent.action.MAIN" />

                <category android:name="android.intent.category.LAUNCHER" />
            </intent-filter>
        </activity>
        <activity android:name=".ActivityTwo">

        </activity>
    </application>