Well, if it executes as PHP, it could only do what a regular PHP file can do. If it generates an image, the code is done and the saved image isn't going to run any php. Kinda like saving the output of a PHP page as plain static HTML.
Not sure what the purpose would be though, since you can just link to a PHP file as an image, then set the content-type accordingly--like a random image script does.
Also, I'm not sure regular images would display correctly if PHP is trying to handle them like a PHP script that has been renamed to .jpg/gif/etc. I'll have to play around with that one of these days when I'm not too busy being lazy.
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