.GIF did not get recognized as a .gif file.
I manually deleted the .GIF file from the disk ( wiki repository), renamed the .GIF to .gif (lowercase) and uploaded it.
This resulted in the expected inlining of the .gif image.
I think this case-sensitivity will be an annoyance and if its an easy fix, make it media-file-extension-case-insensitive for inlining of images.
