What's happening here is the first image gets rendered like this:
alt="figure demonstrate the use of ->">
At which point, the HTML sanitizer gets its grubby mitts on it, thinks the first > is the end of the tag and says, "HEY! This doesn't look right... No, no no no, this doesn't look right at all - there's supposed to be a closing quotation mark before the end of the tag! I'm throwing this whole mess into the bit bucket."
...which leaves you with
The obvious solution is for the Markdown engine to do the same thing you would do if you were typing out the tag manually: escape any special characters in the alt text before inserting them into the output.
Regarding the redundant image... You don't have to use the little "Insert an image" toolbar utility to put these in if you don't want to. If you already have an image hosted somewhere reliable (preferably on i.stack.imgur.com since we have some control over that and can prevent images from expiring...), you can just write out the Markdown directly and slap the existing image URL into it.
But it's not a big deal. Bytes are cheap.