Take a look at post #6 of this thread: How to disable Skydrive and photo album in WLM 2011
The portion of the above post (quoted from "...winston" at the annexcafe/Windows Live Mail Newsgroup on 11/2/10) that includes the phrase you mentioned is in the 2nd paragraph below but I think the first paragraph is for the right-click option while the second applies to adding photos to the email you are composing:
"...in the message composition window (Select a photo shown in the Photo e-mail to reveal the Photo Email Tools/Format), click the paperclip to change a photo e-mail to one with attachments...
Separately from using Explorer with the Right click options...since folks do wish to attach pics when composing new messages in WLM 2011 (when signed on to Windows Live with a Live ID)
- To avoid any 'convert to Photo e-mail interference'....uncheck the WLM 2011 option to 'Convert messages to Photo e-mails when adding photos' on the program's settings Compose tab(ALT F O M)..."