I could be wrong but I think that once the picture is embedded in the document it becomes fixed and cropping is not possible because it is no longer a 'picture' but a MS Office formatted embedded object.



You can see this if you try to copy and paste the embedded photo-object from Word onto the desktop. You will find that the 'paste' option is not there (greyed out) since Windows can't handle the object. Only MS Office apps, like Word can handle it and, even then only as a copy-paste option within Word or into another MS Office app such as Excel.