Normally this location will default to the directory containing the style sheet file for the current style set. If assigned independently, the ResolveImageUrl method consults the path you set in ImageDirectory (along with other settings which may override your ImageDirectory) when it returns it's resolved image URLs at render-time.
Cascading Style Sheets (CSS) mandate image URLs appearing as an url() must be inside or beneath the site and directory from which the CSS file was loaded. The browser resolves these url() values in accordance with the CSS specification requirements when it requests the images from the server. This means certain CSS style properties like background-image may not resolve according to your ImageDirectory setting.
Target Platforms: Windows 10, Windows 8.1, Windows 8, Windows 7, Windows Vista SP1 or later, Windows XP SP3, Windows Server 2008 (Server Core not supported), Windows Server 2008 R2 (Server Core supported with SP1 or later), Windows Server 2003 SP2