Turns out you actually can upload here, you just can’t embed the upload… but if you paste the image into the text box, wait for it to finish, and then remove the exclamation mark from the beginning, it works.
If the original upload is:

Just remove the ! at the very beginning:
[Uploaded image in the Pluribus thread - About This Message Board - Straight Dope Message Board - December 29 @ 10-23-35 AM@2x|690x293](upload://a2dZuVuXpN6mKF9ecOtdOzG8oZd.jpeg)
And then it works…
Did it always work like that, or was this a recent change/bug? How bizarre!
If this is an existing bug and not a new issue, I think this means that every attempted upload over the years is already in our storage bucket — they would’ve gotten uploaded as soon as you added the image, even if the system subsequently denied the embedding.
I agree that this is probably not something we should use or rely on. It’s probably not meant to be this way. I’ve reported it over at the Discourse meta forum too.
Or if you just take the URL and paste it without the Markdown code, Discourse will auto-display the linked image (technically this is subtly different from a real “embedding”, but the end result is the same):
Yep, with that 2 step dance we could upload images and embed them.
But I repeat: we better not start doing this for all images or we may end up killing the SDMB.