Images are stored as data URIs [1]. Note that they could also be stored as entries in a zip file too! [2].

[1] https://en.wikipedia.org/wiki/Data_URI_scheme

[2] https://github.com/gildas-lormeau/SingleFileZ

They're base64 encoded[0]. (This is an approach I myself have used in the past for simplifying the archival of regulatory texts.)

[0] https://github.com/gildas-lormeau/SingleFile/blob/15801c8ef4...