Hello,
A block type replacement always removes the whole paragraph when doing the replacement, as the documentation explains:
block (default): replaces the variable and removes its containing paragraph.
An inline replacement keeps paragraph styles and other contents in the paragraph.
Maybe you need to set a custom textWrap style to the image WordFragment or apply another extra style? Please note that an image has styles that are not available in a text content.
We have done some tests and everything is working correctly. If you send to contact[at]phpdocx.com a sample DOCX template we'll check it.
Regards.