Yes, this encodes the actual image into the QR code data, with error correction intact. This allows for a larger image area and you still get the benefits of er

Yes, this encodes the actual image into the QR code data, with error correction intact. This allows for a larger image area and you still get the benefits of error correction. There is a padding section between the data (roughly encoded in the right side) and the error correction (left side.) Most QR encoding methods make the padding section as small as possible to get the best printable result and smallest QR code. This makes the padding huge, thus the limit on URL length and automatic URL shortening, and uses these padding bits to encode the image. Of course it is a bit outside the spec doing it in this way, but it has worked with every reader I've tested so far as they don't verify the padding bits.