It is simply a security test to determine whether or not the "user" is human or a programme. This will ensure that only human visitors are able to submit this form, and not spamming bots who are browsing the web, jumping from web site to web site in the hope that they can submit a form whenever they can.
It is well known that computer programmers can design programmes to undertake many jobs automatically, including their visiting a large amount of web sites, on the Internet, by following the web site's own links leading them from page to page on that web site. Then they collect email addresses, listed on web sites, they automatically submit forms they find, and even trying to break into password controlled web sites, by trying to login to them over and over again using computer generated passwords.
Fortunately, at least currently, it is impossible for a non-human ( e.g. a computer program ) to extract a word or a combination of letters and numbers from an image. If the letters and numbers are not all of the same size and of similar font this is impossible.
This is why, our image verification system is so important to ensure that only people actually submit our forms.