From my testing, it looks like the issue lies in the use of a hidden directory path. If I use a hidden directory, I get an message stating that
If I use a regular folder then the image loads as expected.
Iām not sure if this is a bug or feature, but I will state that you get the same behavior if you try to link this way to a markdown file in a hidden folder as well.
Instead of using /.attachemnts/Picture1.png, you could use a URI similar to file:///Users/username/some/.hidden/path/to/Picture1.png which appears to work.