If you're clicking Play or Test inside the Twine application, you won't be able to see the images from there, but if you use "Publish to File" and then open the resulting .html file in your browser, you should be able to see them that way.
Viewing post in Twine Template ✦ Dialectic comments
Weird, thanks for letting me know. Is your index.html file in the top level of the unzipped game folder? The template .zip should be extracted, then any playable files saved in the same directory where you see the "images" folder. You should see "images" and "index.html" next to each other when you open the template folder. If it's not able to access those files locally, they won't be visible when testing.