Q:

Images are being squished in Microsoft Edge 16 - Small images in Edge

There is a bug in Microsoft Edge 16 (that has been reported several times and been confirmed here: https://developer.microsoft.com/en-us/microsoft-edge/platform/issues/7778808/ . 
It squishes the image to a height of 30 pixels.  Here is an example: 

Why does this occur and how do one fix it?  

A:

The fix
If you're using Wordpress, then insert this in the bottom of your functions.php-file:
/*
 * Work-around for Microsoft Edge bug ( https://developer.microsoft.com/en-us/microsoft-edge/platform/issues/7778808/ )
 */
function custom_edge_browser_fix() {
  global $is_edge;
  if( $is_edge ){
    add_filter('wp_calculate_image_srcset', '__return_false');
  }
}
add_action( 'init', 'custom_edge_browser_fix' );

What this does it that it disables (removes) this srcset-tag in Microsoft Edge-browsers.  This might have a slight effect on the loading-time for the page in Microsoft Edge, - but people using that browser doesn't have a soul anyway...

The explanation
I work for an agency, where we have had this reported from 3 individual sources within the past 2 days, - so I assume that it must be happening quite a lot.  
The bug is (as far as I've heard) only in Microsoft Edge and are related to lower bandwidth connections.  As can be read in the bug-report, then it appears that it isn't on every load, with a slower connection that the bug happens.  So it is quite the corner case.  
srcset is a tag that can be utilized to show different size images, based on the size of the view-port upon loading of a website.  Wordpress automatically generates the different sized and automatically generates this tag as well and chucks it on images.  If the tag is removed (as above-written code does in Microsoft Edge), then the original size image will be loaded every time, disregarding size of view-port.  
If you're getting this error and you're not using WordPress, - then you can get around it by just removing the srcset-tag in another way... Or wait for Edge 17 to be released and rolled out. :-)  
Minor addition
I had to clear the server-cache for the fix to take effect on some pages.  One could also just wait a while (like a day or so) and let the cache expire by itself.