Mail - photo attachments don't change size - large medium small

Hi, trying to attach photo images into email using Yosemite Mac Mail but the size changing feature doesn't seem to be working.

I dragged my jpg image in, actual size = 4.4MB and it fills the email window. I change the drop down menu for Image Size to Large, and the photo reduces dramatically to 13KB (and only about half an inch across in dimensions displayed.) If I then try Medium or Small, it is exactly the same, 13KB. It seems to be by default choosing the very smallest size, but I can't get it to choose Medium or Large.

Any ideas how to change this please?