There is a new functionality for users to list all images they have previously uploaded, and delete them if desired. It also allows admins to view and delete images hosted on the local instance.
When uploading a new avatar or banner, the old one is automatically deleted.
Instance admins should also checkout lemmy-thumbnail-cleaner which can delete thumbnails for old posts, and free significant amounts of storage.
This is great news, and addresses what was until now a big shortcoming… a user had no way of managing uploaded images and admins had to crawl through the DB to manage or delete them.