I tried to see which versions was or wasn't affected, I tried numerous combinations of versions of Office (I have Business 365 and family, on different release channels), of new Outlook, I had different versions too, different webview2... Nothing worked. Tried to downgrade... not better.
"Sometimes the outlook has mis-recognized the photo as text, so the photo function does not appear" => this is the issue now. There is no "misrecognition" but the image is selected as it was text. Everywhere, in the Windows App, but on the OWA on Edge, Edge canary, in private mode (so no storage or context), Firefox, and on iPad on Edge and even Safari (I had to negotiate with a hand of mine to push that icon, hard times).
Also, the Ribbon related to images is not displayed when selecting the "image"
So, it looks like some online resources has an issue and that bug is generalized.
I don't have time now to investigate in the browser, and that'd would only be to figure out some workaround...
@Bearcatte
"Why is it I have more issues with Outlook than any other " : There are not more issues with Outlook, it is still a young app still being built developed for the future, but it is far far more complex than people imagine... 100s of millions of users to serve, with complex combinations go devices and OS, but also web services, etc. so having one similar codebase to build around for all platforms makes sense.
I understand this is frustrating, but it is a minor issue. One solution, and also a god practice, would be to use OneDrive or else, to share links to pictures by email, so it uses less 'resources' the picture stays in one place (you cloud storage provider) and links are exchanged.
"If it ain't broke don't fix it." => It's a common saying (and some lapalissade like stating the obvious), and, its convoyed meaning, does not fit well with technology, there always are things to improve, the product must evolve... and you should always have a mid/long term vision... most people have an aversion for change (or an appetence for change, like me), but you can adapt to those "techie features" 🦾😉
If you have issues you have not been able to fix, let me know!