File extension crossover

What I’m trying to do

I am completely new to Obsidian, downloaded yesterday. I have been sorting out how things work, particularly for images, since I am an artist and they will be important to my workflow. I am on a Mac and I used Spotlight to search for a jpg image I had dragged from a folder into an Obsidian note. It opened Moneydance and a pop-up informed me that “The file you selected will be added to your Moneydance library and converted to the new format. The original file will be moved to the Moneydance backup folder.” I hit Cancel on that but I am bewildered as to why this happened.

Things I have tried

The Spotlight window search for my jpg shows the location as “Markdown notes.md” which is the Obsidian file the image is in, but it has the Moneydance icon over the name and “Moneydance data 8 KB” under it. And it opens Moneydance, not Obsidian.

A search turned up a post here from April '21 from donwowar worrying about whether the .md file extension would create problems. The only answer was that it shouldn’t, and not to keep Moneydance files in the Obsidian Vault and not to store the Vault in main documents, neither of which I have done.

What happened and why and how can I fix it?

Thanks for any help.

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