We've been using a custom field for term images just like JJJ's plugin in our theme(s) [Mai Theme] for a while in the classic/hybrid era. Mostly for a custom "term grid" block, similar to a post grid but for categories/tags/terms. It's been great but obviously custom and certainly leads to a bit of theme lock-in.

I'd love to see this supported in core.

Another benefit/use-case is for the OG (Open Graph) image on term archives, as mentioned in an earlier comment. That's reason enough to add it IMO.