In Notification/Confirmation emails, you can upload images when using a Custom Message.
In your form, go to Settings > Emails & Actions > Notification/Confirmation Email. In the email, change it to a custom message. To insert an image into your custom message email, click on the Insert Image button (which looks like a small mountain).
This will bring up the image box. Drag the image or click on the box to upload the file. You will also have the option to upload from a link or from previous images uploaded.
Once the image is added, you will have options to resize, align, replace, style, and more. These features can be accessed by clicking on the Image.
Note: Just like attaching files from your submissions our email sender will only send up to 14 MB of data per form, so to ensure delivery please make sure your picture is less than 14 MB. If your image and data collected in the form is over the 14 MB amount will create issues successfully delivering the emails.