Mmmmm. A difficult one. Sounds as if Word is mis-identifying the jpg link as another (unknown) file format that does not have an app associated with it. Very odd. Sounds like a new hyperlink related Word bug that wasn't present previously but why your Word is affected and not mine I don't know. Maybe a random bug that affects some and not others? Just guessing.
I know this isn't an immediate fix but it may get fixed in future updates. Good luck. Maybe some expert will help.
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