HI Pavel,
The issue is with some client’s of mine and due to this problem, it is not live anywhere.
Even without the shortcode installed, it can be very easily replicated by throwing my above example in a draft and previewing on a site with Speed Optimizer enabled. Check the resulting image in a browser debugger and you’ll see the src attribute mangled in a way similar to my second code block.
Thank you for the input @diondesigns. The main reason I’ve been trying to use wp_update_post has been to create a revision – and thus make any operation run able to be reverted (until other changes are made). Any idea if its reasonable to create a revision in a way other than wp_update_post?