It copies links to images (and doesn’t know those links are not absolute either).
I have a big HTML file with about a 100 images + text in between. In all other note taking apps, I can ctrl+a - ctrl+c - ctrl+v and it copies all images and text into the note. In obsidian, that doesn’t work - tries to create links to those images instead.
Ctrl+shift+v pastes only text, no images, and strips all formatting.
Disabling “convert HTML to markdown” option does the same, only text gets pasted, all formatting gets stripped.