The printing technology can probably handle printing a photographic image on an inlay, but trying to get a photograph that's worth having that also looks good printed only in a one-inch circle and not a jumbled mess is a different animal. We're so used to seeing photos on our phones and monitors that we forget making the transition to print on a relatively small inlay isn't always the greatest. Even for line art fro an inlay, it's easy to have a lot of detail on screen but looks pretty poor once printed.
For any inlay design, the mantra is always to make test prints at actual size and put them at arms length. If you have a photo that you can do that with, and you are happy with how it looks, there's nothing stopping you.
Well, I suggest you try mocking it up different ways to compare.
Do a chip series with, say, colour photographs.
Then do the same chip series with the photographs modified somehow, transformed into flatter colours or simpler lines.
See what looks better when printed out at 7/8" or 1" diameter circle with relatively high resolution print.