Upload images in Nintex Form

Guess it is only possible the other way around at this moment.

Upload your image to an image library >> copy URL >> paste URL in image control in your form.

With a workflow?

Nintex attachment workflow

Attach the image to the form and then use Nintex workflow to get the attachment from the form using "Copy to SharePoint" action.  This video by Dan Stoll that shows you step-by-step how to do this.

Nintex Workflow – Copy list item attachments into a library folder | The SharePoint Pub