The "Optimize images for mobile devices" setting missing in Experience Cloud site workspace

The available setting in the Experience Cloud site workspace varies depending on whether the Content Delivery Network (CDN) is used.

How to Check Workspace Settings

1. Go to "Setup" | "Digital Experiences" | "All Sites".
2. Click "Workspaces" next to the target Experience Cloud site.
3. Click the "Administration" tile, and then click "Preferences" on the left menu.

CDN is enabled: "Optimize images for mobile devices" is displayed.
CDN is disabled: "Optimize cached images for guest users on all devices" is displayed.  

How to Check CDN Settings

1. Check CDN Settings:
   Go to "Setup" | "My Domains" in org and check the settings for "Use Content Delivery Network (CDN) by default when enhanced domains are enabled for Experience Cloud sites" under "Content Delivery Network" section.
   For domains with extended domains (*.my.site.com), the Salesforce CDN is enabled by default.
   
   
2. For custom domains:
   If a custom domain is used, the configuration on the "Setup" | "Domains" page takes precedence.

Reference:

Display Optimized Images on Mobile Devices

Display Images Faster on All Devices