Can't really tell exactly what the problem is. However if you look at the site I'm starting to develop and look at the first node (Black Knights March Citrus Parade) you can see the issue.
http://www.stamfordhighband.net/dev/
The text [inline:4=Black Knight March On!] actually shows up on the screen instead of the picture. But if you click the article title then the picture shows up.
I've also noticed if I put in multiple inline images (using the Upload.Module functionality), no matter how many different way's I've tried I can't get mor than 2 images to display in the node. Also, if I do a view source from the browser I see a lot of bad HTML for the inline tags after the first 1 or 2 (for example partial tags or just printing the inline tag itself in the page source).
I am using the TinyMCE module (latest update for 4.7 etc.). I don't think that is the problem as even when I disable it and save the node same issue.
I am using the Upload.Module built in to 4.7, and the inline.module downloaded from the inline module page.
I'm a noob. Hoping to use Drupal. Had some success configuring the site, but I'm definitely struggling with this image issue. My goal is to make it fairly simple for selected users of the site post news stories with a single image appearing in the teaser, and possible 3 or 4 more images appearing in the article. Any advice on the best way to do this and make it simple for users. The inline tag doesn't bother me, but it needs to work and come up with something that will look reasonable on the screen.