First off, you're doing this;
src={`http://127.0.0.1:8000/api/${item.image}`}
Why not just send the correct path from your backend? The api prefix doesn't make sense here. This will also fail when you actually deploy your site. File URLs are built-in the storage; https://laravel.com/docs/10.x/filesystem#file-urls
So then it would be something like this;
$url = Storage::disk('public')->url($path);