Texteditor
Since the last update Texteditor is not working correct. When I want a word in italic, Texteditor makes the whole text italic. When I want to paste a picture in TE: it is not possible.
iMac 27″ 5K, macOS 12.6
It looks like you are working in Plain Text.
You need to go to the Format menu, and choose "Make Rich Text".
Once a document is set to Rich Text, you can do all that you want to.
Plain Text is just text, so no pictures, and even the italics are just for presentation on screen and are not saved (again, it just text and nothing else).