If the upload fails, the html should be left unchanged.
If the upload fails, an image tag like the following is added to the html (visible in the code view and the output html):
<img src="blob:https://www.froala.com/761b634c-7e1b-4f20-a3f3-bf752cd21489" style="width: 300px;" class="fr-fic fr-dib">
Attempt to upload a broken image by drag and drop, e.g. in the basic froala demo. You can just rename some random file to an image extension to get a broken image that makes the upload fail. Inspect the html in the code view.
Ubuntu 16.04 (Xenial), 64-bit
Chromium 61.0.3163.100, Firefox 56.0
While you'd lose the CORS proxy, I suspect you can avoid this behavior by setting the imageUploadRemoteUrls option to false.
I just tried that, it doesn't see to make a difference.
@Medo42 please send us the image you're trying to upload so that we can check this. Thank you.
Hi. You can use the following file to test it. Just drag and drop it from your filesystem to the editor on this page: https://www.froala.com/wysiwyg-editor

The fix did not work for me, still getting a broken blob image, and I get a console message of "The given range isn't in document."
@sodacrunch did you fix this issue?