I am no expert, but from what I have been able to see (through trial and error) is that if there is some sort of border or container around the image then the image does not fill and it shrinks to smaller than thumbnail size. Or it may have something to do with the caption. Featured images are fine. It is only the images within the post that shrink and only if viewed with Internet Explorer and on a larger screen or monitor (on my laptop and phone they are fine). I was alerted to this by one of my readers as a recent change.
I am not sure what changed or where (browser, or wordpress–the theme has not changed/no recent updates). I tried to insert some CSS but I am a novice and it did not work.