Firstly use obsidian-export to export the Obsidian Vault/Notes to regular markdown files.
Once after exporting in the regular markdown format use the following script to convert the markdown to docx. This will require Pandoc.
pandoc md-file.md \
-o out-docx-file.docx \
--from markdown+yaml_metadata_block+raw_html \
--top-level-division=chapter
Here the images are exported successfully, no issues at all, even with relative paths.