Images embedded into Outlook 2016 Stationary or Signatures are displayed normally when composing emails, but are not visible to recipients. Users on Outlook 2010 are not affected.
It seems that Microsoft changed default behaviour how embedded images are sent starting Outlook 2013. To restore the functionality make following registry change:
- Navigate to HKEY_CURRENT_USER\Software\Microsoft\Office\16.0\Outlook\Options\Mail
- Add a new DWORD (32bit) entry Send Pictures With Document and set its value to 1.
If the above registry entry is not set, Outlook 2010 and older behaves as if value was set to 1, but Outlook 2013 and 2016 behaves as if value was set to 0.
Note: I had another similar but somewhat opposite issue where Outlook 2016 would not display images embedded in Outlook stationary while composing an email, but after email was set it would appear as expected with all images in sent items, and recipient would also receive the email with all images embedded and visible as expected. This appeared to be a bug in Outlook 2016 and was fixed by an update...
MS Outlook 2016
Windows 10 Pro