Not unbelievable at all. AND... this is not the only thread on this subject. Check this one out too:
http://answers.microsoft.com/en-us/windowslive/forum/livemail-sync/windows-live-mail-strips-text-embedded-images-and/2a06a132-f5fd-432e-a78b-f3afb5f63a44
In the beginning, it was difficult to convey the problem to the crew at Microsoft. Many of us tried our best, even sending files of WLM-encoded incoming and outgoing messages that demonstrated the problem. Finally I believe that the MS folks got a grasp;
they promised a fix, but it never came.
What's maddening is that the earlier 2009 version of WLM did not exhibit this problem at all. Equally frustrating is that correspondence between a WLM user and an MS Outlook user never has an issue. But get someone using Thunderbird or gMail in the loop
and WLM takes the message apart and 'redistributes' it.
Notwithstanding, WLM is a good mail client program with features that even MS's Outlook fails to provide. All this dancing around over the past couple of years gives me a headache, but I won't abandon WLM because of its several advantages over the MS "Cadillac,"
Outlook.