I'd expect that if it is larger than the mobile screen width it would fallback to 100%. But I believe that all images should have an adjustment (the same way the font size is smaller, so should be the images if you resize them on the desktop). It should probably be always percentage based (to be responsive to the several device sizes), or have predefined sizes like google docs or gmail (small, medium, large, original). Remember that the main use case (IMO) is to reduce image sizes, not to make them larger (definitely not larger than what you can see in the screen)