I'm having similar issue, I'm using this package https://github.com/Bjornmamman/Our.Umbraco.AutoImageOptimze Locally works fine as expected with latest version of UmbracoCms 8.11.1 However once migrated to azure blob storage using UmbracoFileSystemProviders.Azure.Media Files are fetched fine, but never in webp extension, tried query params format=webp, all the same;

Also standard cropping queries do not work neither, looks like image processing is simply ignored.