Weird... to me it always has been in-app. It looks like this:
Could it be something on the 'permissions' side? I have it limited, afaik. Otherwise maybe device compatibilities...?
Discussion
This is how It looks for me now, but before that "attach image" button just opened an app selector, so I chose my galley app and all was fine.
This thing just is broken
definitely check the permissions in the apps info, long press the app icon in the launcher/app tray list and open up the app info page and check the permissions, it should be asking for reading all the disk, with that disabled it only can access its own app-restricted filesystem