A common problem with embedded pictures is that it isn't really standardized. Text mails are fine, that's what mail started with. Attachments are fine also. But embedded stuff isn't. So different mail programs might treat it differently. So maybe the email program the sender uses isn't fully compatible with your email program.
if you use webmail in a browser (which isn't sure), you can try a different browser.

Another common problem is that the embedded picture resides on the PC or network of the sender, not on the internet. Then it won't work either.

And still another issue is that some email programs have a default setting that makes that images that are on the web aren't displayed for privacy's sake. Or maybe you set that setting yourself.

But your subject line can be interpreted also as meaning that emails sent from Hotmail don't show up correctly in your email program.

Kees