A family of Microsoft spreadsheet software with tools for analyzing, charting, and communicating data.
I have exactly the same issue. I reported this issue to Microsoft 4 times since July 2019 with no feedback:
2x through the help improve office; once I was asked to submit an example file, but no one ever responded.
1x - directly to a Project Manager, who said he would let the Excel for Mac team know.
1x - recently to UserVoice under Excel for Mac.
https://excel.uservoice.com/forums/304933-excel-for-mac/suggestions/39663556--linked-picture
I am using version Excel 16.35 (20020507) on Insider, but every version since July has the same problem.
Linked Images is such a great feature, but it does not seem to be implemented correctly on the Mac. The image is scaled and cropped. I suspect it has something to do with the retina display expected screen resolution on the mac since it is off by about 2x. The resolution of the input file does not seem to be a factor.
Excel Mac will correctly display typed text as a named range / linked picture, just not images (jpg, png, pdf).
More info on the concept is here:
https://trumpexcel.com/picture-lookup/
Creating a new MacOS account with wholly new user preferences does not resolve anything.