If it's still not resolved, there is a difference between uploading through that method and from a link. The link method doesn't have a 0.12MB limit, which was something that I had an issue with when I was trying to upload images for my Tamagotchi log (I haven't been on here for a year so I was a bit rusty). You can just right click on an image, click on 'copy image address' and paste it here. The link should end with a .jpg or a .png and after a second or so it'll automatically turn into an image. Alternatively you can click on 'Insert other media' and 'Insert image from URL' and paste it there.