This is not a functionality bug, but rather a mislabeling in the system. As you see, when you go into the Element - Image area of the Theme Styles, all of the labels are “icon”.
Actually, the image element theme style doesn’t work either … I tried adding both an icon and an image element and then I used the theme style editor for the element - image, and nothing is happening. I see icon block, but that seems to be something different, as well. Not sure what the issue is, but I can’t get any of these settings to work.