I can reproduce what you are describing, using Word 2021 (on Windows 11). Pasting a picture, even one whose Text Wrapping is "In line with text" into the Footnote Separator will crash Word. Inserting a saved file via Insert > Pictures > This Device does work.

I recommend that you report this via the feedback facility in Word.

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Stefan Blom
Microsoft Word MVP

Microsoft 365 apps for business
Windows 11 Professional