Yes, if you already have a set of pictures downloaded and accessible, (and you know how to insert them into your text within Paratext) then this feature is probably NOT for you.
This feature is for those who know next to nothing about Biblical illustrations and have limited skills to go online, find what they need, download them and place them in the right location in order for Paratext to access them etc. It is intended for people who just say, "Give me some pictures in my trial publication!" and it is (hopefully) helpful for them - as it automatically downloads a set of images, unzips them into a standard location, and then displays them in a viewer where you can search for pictures based on a reference (range) and/or artist and/or key word. Selecting them will put them into the PicList for the current configuration at an 'optimum' (but adjustable) reference. But as Pepe has rightly stated, it will no put them into Paratext for you. [This is intentional, as PTXprint never modifies Paratext data.]
There is a custom tool in Paratext which allows you to import pictures from PTXprint's PicList to create the required \fig ...\fig* markup; but that's another story.
Unfortunately, at this stage (as we wait for permissions etc.) the only "image sets" available are those with Creative Commons licensing. We hope to add other image sets in due course, but sometimes the wheels turn slowly...