Are you using the Chrome extension or some other browser?
I'm seeing that there; currently using Ungoogle-Chromium. I've tried disabling/enabling the extensions to confirm indeed that is the one adding that entry to the context menu and it is (instead of maybe this Chromium adding a standard reverse image search with the default search engine), as the context menu item goes away when the extension is disabled...
... or maybe it is, since Ungoogled-Chromium has a "NoSearch" default engine, that gets overwritten when the Kagi extension is enabled, and when disabling it, it goes back to "NoSearch"... Maybe Ungoogled-Chromium is the one doing this? Anybody using it could confirm?
Tried searching their GitHub but couldn't find any messages about it.