To extract text from a single picture you’ve added into OneNote, right-click the picture, and click Copy Text from Picture. More tips here.

Open any image containing text in the web app, and you should see a Copy text from image link appear at the top.

The Snipping Tool is the easiest way to extract text from images on Windows. You can launch the utility from the Start menu, either by searching for it or by finding it on the full list of apps.