Pictures are inserted in the library then in the topic editor. This provides a way to use the same picture multiple times and modify it from the library without the need to find it in the topics. To insert a picture, either:

When a picture is clicked in the topic editor, the "Picture tools, format" contextual ribbon tab is shown to modify the picture's properties. From there, it is possible to:

See the How to add an item to the library step-by-step guide.