Darn, I realized I was uploading using our CidiLabs Design Tools image embed tool rather than the Canvas tool. They behave differently. The Canvas tool creates a course specific URL, but CidiLabs creates a URL unrelated to the course, no course ID. When saved to an Item bank and used in another course, it uses the same URL as the original question. Course specific images still seem to work in other courses, visible to students, but I don't know how that will work with a Master course. Does new quizzes give students permission to view images located in other courses?
Either way, I was talking about the URL rather than the filename in Files, the URL doesn't show the filename. Still, when I chose a course file to embed using the Canvas image embed tool , it did not make a copy, it used the original file so no (1) or -1 was appended in Files. Using the CidiLabs upload tool, if I unchecked "Overwrite if Exists", it did create a -1 copy of the file with a different ID number; it's a choice.
Images are treated differently than other files, files located in another course are not accessible to students when the quiz is in a different course.