Earlier quoted context omitted.
I don't know about browser internals, but I would guess that the browser decodes the image once into a format that can be shown on the page (so from PNG/JPG/WEBP into a RGBA buffer) and then discards the original file. This saves a bit of memory in 99.99% of cases when the image is not immediately saved afterwards.
One cool related thing is that (I believe) modern graphics cards (even Intel) can store and use JPG blocks directly from GPU memory, so it's not necessarily beneficial in the long term to convert to RGBA in advance. Though I think no modern browser actually does this, especially given how power-cheap decoding jpeg (with SIMD) already is and how likely it is that gpu bugs would interfere.
It is however perfectly possible to decode blocks of JPG on a GPU by using shader code.