MicrosoftI was not even considering that the imbedded in the worksheet option should not be made available.
Regarding your needs -
I spent some years as a systems acceptance tester where the test results needed to be recorded for reference within fault reports, and then regression testing.
And, with that was the continuing new versions of requirements, design, and processing module specification to go with the actual results from the testing, along with the problem reports, analysis of the problem etc.
For that I was using WinWord as the 'work and document management' facility -
3 column table
1st being date of the associated document,
2nd being a live link to a spreadsheet, other document, or subsidiary WinWord documentation document.
3rd being any appropriate notes - such "Superseded" and see report "reference" etc.
I found it best to have the WinWord documentation documents kept to about 2 pages for visual reference,
or 2-up printing with readable sized characters.
That process had a substantial problem as if "SaveAs" was used on any a subdocument that had been opened via the link, then the link would be changed to point to the new file, but the descriptive text on the link - as in what the user saw would NOT be changed.
So - the WinWord documentation documents had to be read only to the authorised viewers.
However that allowed (OK required) a constraint to be placed on them -
any changes or notes to be incorporated had to be submitted to the author/owner for incorporation in the document.
So that made a (email recorded) record of the changes that were being made to the official versions, and their issuing.
OK - the above is getting away from the "=IMAGE()" function,
but I hope it does, in association with your needs indicate the needs of the function's workings for the sort of use that the wider user environment would have for the facility.
Re Onedrive etc.
On the basis that the document would be circulated to specific authorised persons, then a folder with the images would also be set to be readable by those authorised persons.
That is what I would hope the use of =ADDRESS would facilitate as a pointer to the limited access folder of images, so making it a conscious decision to pass on a document to another person, and then have their access authorised.
Not something that would be easily done within a self-contained Excel workbook, even if set with a read password.
Well -
