When I insert an image (Insert > Image) into a page and select the preset 100px or 300px size, the image looks distorted, as if it is not being scaled down correctly. Entering a manual size (for example, 200) has the same result. The only preset size that looks OK is 500px, which is too large.
If I use the Wiki Markup Macro and insert the image that way, with a width of 200px (as an example), the image scales down fine.
Any thoughts on why this is?
It seem that you have encounter a known bug. When a image is resize to 300px and below, the Confluence will try to resize the thumbnail instead of the original image. Thumbnail is a reduced-size versions of the original image therefore when Confluence try to resize it, the image becomes blurry and distorted.
The bug is currently tracked in this ticket https://jira.atlassian.com/browse/CONF-28189.
As a workaround, you can resize the image to 301px which will avoid the current bug.
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