When a JPEG is minted onto Ethereum in Open Sea, is the NFT injected into the blockchain or does it remain on a server somewhere?

The image is not minted into Ethereum.

A NFT is just an address, and serves as a label attached to an item - be it an image (jpeg), or something else.

The image itself may be stored on temporary storage which may then disappear or some permanent storage by the marketplace, or the owner.

I did read reports of digital items being stored on a blockchain but it is not sustainable solution.

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