How does Webpack handle images in src folder for React application?

Am following a React tutorial which has some images in the src/assets folder and imports them by giving a relative path to component files. I’m a bit confused how this is handled for production.

I understand that generally webpack bundles all the js and css together to create a single bundle file but if you have large image file assets in your src folder, then how are they handled for production? Do you need to upload them into the same /assets folder structure when you deploy your app to a web server as the code will still be looking for those relative path references to display the images?