Is this the intended behavior of the img tag?
This is reproducable in the demo.
Steps to reproduce.
Take an image link to a valid image. Make sure it works. In HTML mode add a space between the < and img "< img" as opposed to "<img". Go to the normal view. The image will be broken and display the link as text. Go back to HTML mode and the leading < and closing > will be replace with their ascii codes.
Example below:
HTML:
<img alt="" src="http://2.bp.blogspot.com/-XnIJZV7ZKh4/Te8KJmpEANI/AAAAAAAABFw/yXri-oe39KQ/s1600/Funny+Pictures+of+animals+2.jpg" height="487" width="500" />
ACTUAL:
HTML:
< img alt="" src="http://2.bp.blogspot.com/-XnIJZV7ZKh4/Te8KJmpEANI/AAAAAAAABFw/yXri-oe39KQ/s1600/Funny+Pictures+of+animals+2.jpg" height="487" width="500" />
which gets converted to this:
< img alt="" src="http://2.bp.blogspot.com/-XnIJZV7ZKh4/Te8KJmpEANI/AAAAAAAABFw/yXri-oe39KQ/s1600/Funny+Pictures+of+animals+2.jpg" height="487" width="500" />
ACTUAL:
< img alt="" src="http://2.bp.blogspot.com/-XnIJZV7ZKh4/Te8KJmpEANI/AAAAAAAABFw/yXri-oe39KQ/s1600/Funny+Pictures+of+animals+2.jpg" height="487" width="500" />