Hi Kathleen,
The Paddings set in Appearance > Customize > Layout > Container controls the padding for the Content. It doesn’t add padding to Image Blocks or other blocks. See here for reference: https://docs.generatepress.com/article/content-padding/
If you recently updated your WordPress version, that could be the cause of the issue. WP 6.1 decided it would be a good idea to remove the Margin they used to add to their Image Blocks.
So for now you need some CSS to add it back in. Try adding this through Appearance > Customize > Additional CSS:
figure {
margin-bottom: 1.5em;
}