This is exactly what happens. I tested and now am sane again.
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Re: Send pictures as attachments and not embedded with iPhone
Aug 12, 2013 9:51 AM (in response to J145)
My findings are that how the picture is sent is relatively simple. If you have a signature which is html (most likely created by copy and paste), the picture is embedded into the mail. If your signature is plain text (or you have no signature at all) the picture is attached.
How I tested...
I sent pictures while I have no signature. The picture is attached.
I type a signature manually. The picture and the signature are attached.
I create a signature by copy and paste (signature copied from another mail, or from notes) and now when I send a picture, it is inline aong with the html signature.