I recently noticed that there is no longer an option for inserting an image in a post via a URL with the image tool where previously it was available. Now the only insert an image from desktop.
Is the hyperlink the only option for linking URL of images? If so, why the change for the image tool?
The new feature is a consequence of SE responsive design efforts. See Editor improvements for images and links from Meta Stack Exchange:
Adding a link and image in your post is no longer done via pop up dialog. Instead the controls show up inline with the editor. This is sleeker and prepares the way for us to make our desktop theme work across all devices ... .
Adding a picture directly from a URL via GUI is not currently supported, but it is set to status-planned in No option to upload image from URL anymore (credits to Andrew T's answer) (update: now set to status-completed which means the feature is working again).
Whenever something related to design, user-interface and functionality changes in (GIS) Stack Exchange I suggest always taking a look at the following post Recent feature changes to Stack Exchange. If it is something by design, specific documentation will be referenced from there.
It's still possible, but hidden.
@JoeFriend's answer to Can't upload image from URL anymore:
We no longer have an explicit entry point for this, but you can paste an image link when the uploader UX is showing.
Though at current writing, it might be still buggy for Edge browser.
