Adding images to Knowledge Articles in Salesforce Lightning Experience is limited to files stored on the user's local machine. This is an intentional design change to prevent image availability issues. Salesforce Files stored within the org cannot be selected via the image editor at this time.
This is a design change that's intended to mitigate future occurrences of images being unavailable when added to Knowledge Articles in Lightning as outlined in the following Known Issue:
Images added to a Rich Text Area field on a Knowledge Article created in Lightning are visible only to the creator
Consider creating and/or promoting an Idea on the IdeaExchange for visibility in the larger Trailblazer Community and potential consideration for including the ability to select Salesforce Files when adding an image to an article in Lightning with a future release.
Known Issue - Images added to a Rich Text Area field on a Knowledge Article created in Lightning are visible only to the creator
Salesforce Help - Import External Content into Salesforce Knowledge
000382479

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