The issue is that when posts with images are published to Discourse, the post’s HTML initially looks something like this:
<figure><img src="https://example.com/wp-content/uploads/your-image.png" /></figure>
download remote images to local site setting is enabled on Discourse, the image link will break when Discourse downloads the post from WordPress. The problem will happen any time an image tag with a remote URL is wrapped with HTML tags.
The easiest solutions for this issue are to either disable the
download remote images to local site setting, or to not publish full post content from WordPress to Discourse.
In the future, the WP Discourse plugin may remove the option to publish full posts. There are multiple issues that can occurr when publishing full post content from WordPress to Discourse. Most of these issues should be able to be solved by publishing excerpts from WordPress to Discourse and then using the Show Full Post button to display the full post on Discourse. Does this sound like something that could work for your case?
Another possible solution would be to customize the template that is used to publish WordPress posts. Images could be extracted from the posts and then published along with a post excerpt. With a custom template, the image HTML could be structured in a way that doesn’t conflict with the Discourse markdown processor.