Moodle 3.9 introduced a new feature to allow images to be pasted into the Atto text editor (cf. https://docs.moodle.org/39/en/Images#Copying_and_pasting_an_image). It works when using a modern Firefox browser. In the general case, it seems to work. However, when a student pastes an image into an Essay question in a quiz, that image is not displayed when the student reviews the quiz attempt. It is also not displayed when the lecturer manually grades the Essay question. The text of the students answer is displayed, but not the image. Below are screenshots showing a pasted image when editing the Essay question in the quiz attempt, and the view when the student subsequently reviews their attempt. This YouTube video also shows the issue: Pasted Images Don't Display in Moodle 3.9 Essay Quiz Question Review. This seems like a bug to me.
Above is a screenshot of a student attempting an essay question. The image has been pasted.
The above screenshot shows the student view when they review their quiz attempt. The pasted image is not displayed.