Google SGE, the Search Generative Experience, is testing the ability to not only type your questions with text but also to upload images to your query. So yes, Google SGE is testing search by image.

Brian Freiesleben spotted this feature, I think it is new, I’ve never seen an image upload feature in the SGE query box. Here are his screenshots:

Then you upload your image and type your question and you can get results based on your query and uploaded image:

Forum discussion at X.