Problem displaying signatures with upload

[smgxtreme]

I was wondering if anyone else is having problems with uploading signature.
Signature works fine just doing it with link. But uploading sig displays the bbcode instead like in the picture.

Also, it does work in forums uploading image but sometimes it just shows an "A" and you have to click "A" to show image.

I will include 2 images first showing what happens uploading image for signature and second what image upload looks like inforums.

And yes I checked all permissions and everything is allowed to each group.