Here is a short document on how the “Embed pictures” parameter can greatly reduce the size of the instance, which will make the previewer load a lot faster

This is in line with the recommendation from ESMA

See ESEF manual, page 36:

“ESMA is of the opinion that images should either be included in the XHTML document or be held inside the report package as separate files. ESMA encourages preparers to ensure that their file size does not exceed support of browsers.”