I agree that it is a bit confusing but I believe this is handlebars specific knowledge and our docs are not the best place to explain it, there are lot of handlebars references in the docs and adding explanation of the syntax will be overwhelming

@Paul-Hepple yes, the example above uses the base64 data URI in the data as the input, the same example also works if you give it an URL to an image, if you don't get it to work with the URL maybe is because the server which is hosting the image is not correctly serving it