When you are dragging images into a post you will notice a blue line, in the below screenshot if we place the image at the currently selected blue line, it will show up as a full height and width image:

You can also see that all other images react to the change and adjust their own height and width accordingly.

If we bring the image slightly to the left it will jump over to a half height blue line and we can place it in the smaller block beside the top left image:

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