When the option "Serve images from local server?" is ON, all external images are proxified even if an image already has an HTTPS URL. It's doesn't make sense and wastes traffic.

Please, make an exception for it.

I assume this is bug. The modification in the marketplace doesn't have this problem at all, whereas IPS's does.

Edit:

In fact; yes, the Author of the plugin as also said this (is a "really weird design choice") too:

It would also make a lot more sense if it tried to upgrade the original image to HTTPS before resorting to proxying - just make a HEAD request to the HTTPS version of the image URL and check whether it responds with 200 OK, and rewrite the URL to that too.

I looked into using a plugin for that, but unfortunately it would involve replicating the entire link parsing function because there are no useful hook points in there.

My plugin does exactly that. It checks for a https version if available before falling back to proxying.