You’re missing the point. There are two settings - the Admins (ie. yours), and the users (accessed from the “User Control Panel” link at the top of the forum).
If you (ie. the Admin) set it to SHOW images, and the user has set it to NOT SHOW images in the forum Users Control Panel, then images WILL NOT be shown.
If you (ie. the Admin) set it to SHOW images, and the user has set it to SHOW images in the forum Users Control Panel, then images WILL be shown.
If you (ie. the Admin) set it to NOT SHOW images, and the user has set it to NOT SHOW images in the forum Users Control Panel, then images WILL NOT be shown.
If you (ie. the Admin) set it to NOT SHOW images, and the user has set it to SHOW images in the forum Users Control Panel, then images WILL NOT be shown.
As illustrated by my examples, even if you enable it at the Admin level, then individual users can still choose to NOT show images by setting this option in their Users control Panel.
It works OK on www.wilderssecurity.com which uses the same forum software (ie. vBulletin).
Please enable this option.