With the new versions of Outlook on the web, you can just click the image icon in the signature editor to insert the image from your computer: Note: It’s important that you copy the image and not only its URL.
Luckily, it was very easy to overcome that limitation. Old versions of Office 365 OWA email signature editor didn’t have a built-in functionality like a button or easily accessible HTML source for adding images to email signatures.
: This post was updated on December 10, 2019.