.AlternativeText still works but perhaps your logic in working out which graphic to apply it to is flawed.
ActiveDocument.InlineShapes(ActiveDocument.InlineS hapes.Count).Select
will select the LAST graphic in the file, which may or may not be the graphic you just inserted - depending on where you put your cursor.
Instead, you can harvest the path to the picture via the dialog without inserting it, and then insert the picture while defining it. You then have the right shape to assign the text to.
Code:
Sub TagMyNewPicture()
Dim sPath As String, aInShape As InlineShape
With Dialogs(wdDialogInsertPicture)
.Display
sPath = .Name
Debug.Print sPath
End With
Set aInShape = Selection.InlineShapes.AddPicture(FileName:=sPath, LinkToFile:=False, SaveWithDocument:=True)
With aInShape
.AlternativeText = sPath
.Title = "Look Mum, no hands"
End With
End Sub