I worked for an hour trying to get this to work. I added an image to a term and then created the function call to display it with no luck. I kept thinking that I was not using the term object as it was cryptically specified in the help section. In the end I examined the src code and noted that in functions.php line 14 the src was retrieved from options:
$src = get_option('s8_tax_image_'.$tax_term->taxonomy.'_'.$tax_term->term_id);
I check all options and there were no entries from s8_tax_image....
This did not work at all.