Hi,
Nice to meet you!
From the screenshot you kindly provided, I guess you are using OneNote Appinstead of OneNote 2016 Desktop Version. The "Copy text from picture" option is only available in OneNote 2016 Desktop Version right now. OneNote App is preinstalled for convenience and OneNote 2016 Desktop Version is prepared for more advanced features.
You may access the official website to download and install the OneNote 2016 Desktop Version. Here is a screenshot as a reference:
Thank You! :)