When a caption is added to an image, there's a hidden linebreak character between the image and the inserted caption.
1. Insert an image
2. Right-click it and add caption with some text
=> this creates a frame holding the original image (now having "As Character" anchoring) plus inserted caption, both in the same paragraph
3. Select the image (not the frame!) and drag its lower right handle to shrink it to allow the image and its caption to be on the same line
4. Put cursor in the caption, and use left arrow key to step through characters up to the image
There's a step when the cursor gets to the left of the first character of the caption, staying between the caption and the image, when the next press of left arrow does not move it, but only changes its size. The next press after that finally moves it to the left of the image.
The hidden character may be selected, and its direct formatting be cleared to make it not hidden.
The user-visible problem with the character is that it's shown as leading space in figure index (see https://ask.libreoffice.org/en/question/233189/).
In versions 5.0 and earlier, the image was anchored "to paragraph", and there was no characters before first character of caption in the caption's paragraph.
The hard break was introduced for v.5.1 in https://gerrit.libreoffice.org/plugins/gitiles/core/+/93ab0ff24cb71c36c9e7958046e96d7472b5af90 (related to tdf#93676).
The hidden attribute was introduced for v.5.3 in https://gerrit.libreoffice.org/plugins/gitiles/core/+/feedd45ba2dd308af2d3a1b2f64681b9467535b6 (which BTW broke the idea that hard break should keep the graphic separated from the caption text if the outer frame is resized).
Removing the character doesn't bring immediately observable problems (it works as with it, because hidden hard break does effectively nothing for text flow). However, simply removing it looks incorrect if potential fix for tdf#65323 is taken into account (which would make an as-char image to behave as printed "alphabetic-like" character, which could disallow automatic line break between the image and the immediately following alphabetic character). IMO, a better fix would be to keep image anchored as character (as it is now), but make a separate paragraph for it (using the same Figure paragraph style; separate dedicated style seems to not be required, since figure index does not list paragraphs without number range field), and put the caption on the next paragraph.
*** Bug 131303 has been marked as a duplicate of this bug. ***
I confirm it with
Version: 184.108.40.206.alpha0+ (x64)
Build ID: 5dcbd1bb557450a2d658a710c163b310c0cee157
CPU threads: 4; OS: Windows 10.0 Build 18363; UI render: Skia/Raster; VCL: win;
Locale: de-DE (de_DE); UI-Language: en-GB
But I can't say what would be an appropriate solution.