"You can upload images from a tab in the media dialog, or by dragging and dropping a file into the editor, or by pasting an image from your clipboard. [...] The image will be inserted into the page when you are done."
Now, it is fair to complain that VisualEditor is difficult to get running on your own local Mediawiki instance, as it requires the suite of local node.js microservers (RestBase and Parsoid) that aren't part of the core PHP platform.
That said, this is about to change! The upcoming Mediawiki 1.35 is supposed to move Parsoid into core PHP, and so VisualEditor is going to become a lot more default-accessible. :D
"You can upload images from a tab in the media dialog, or by dragging and dropping a file into the editor, or by pasting an image from your clipboard. [...] The image will be inserted into the page when you are done."