Q2A converts all uploaded images into base64 BLOBs. There is no image upload folder to store your raw images as the binary object is converted and stored into the database in binary (or into a folder if you specify). The image returns as a blob though converting to base64 shouldn't experience quality loss.
During the upload, Q2A resizes the image so that's probably where the quality loss happens. Also, it compresses all images into JPG so you won't be able to upload PNG, GIF, or SVG.