Hi,In Odoo, images and files used on the website are typically stored in the database as binary data. When you upload an image or file through the website interface, Odoo converts it into binary format and stores it in the database. This allows for easy retrieval and management of the media content directly from the Odoo database.

Regarding performance impact,Backing up the database automatically includes all images and files, making it easier to perform backups and restores.

Hope it helps

In my understanding, the images stored in databases as binary and it can get (possible) affects the performance if there are many large-sized of images