I haven't actually tried it, but when you use it for text, it does actually
select (which is what it means by "highlight") all the found text. When you
click out of the dialog, you have to be careful not to click into the
document (which will deselect); one way to do that is to click on the title
bar. But if even that doesn't work, then I guess it just won't work for
graphics.
The second-best solution is to set "Graphic" as the Browse Object, find the
first, perform the formatting (through the Format Picture dialog), click the
browse arrow to get to the next one, and F4 to repeat the formatting. I
believe this does work; at least I've done something similar that did work.
I don't currently have a document with graphics that I can easily test on,
unfortunately.