Instead of:
location /api/img {
proxy_pass http://service/;
}
do
location /api/img {
proxy_pass http://service;
}
https://nginx.org/en/docs/http/ngx_http_proxy_module.html#proxy_pass
https://joshua.hu/proxy-pass-nginx-decoding-normalizing-url-path-dangerous#vulnerable-proxy_pass-configuration