This idea has been developed and deployed to Canvas
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The new RCE images feature to upload images directly is terrific, however, the release seems to have disabled the ability to view image thumbnails. The thumbnails have been replaced by a generic icon. Teachers or designers who are not familiar with the image filenames are now forced to open the files area for a thumbnail.
Comments from Instructure
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For more information, please read through the https://community.canvaslms.com/docs/DOC-16291-canvas-release-notes-2019-02-16 .