....... thanks for all your replies.
I've got it worked out by now and the embedded artwork is not getting deleted after 'Rescan Artwork'.
In my case I had to delete the entry \Covers\ as specified subfoalder to scan for artwork, it was enough to just have the option 'include subfolders' ticked (see screenshot below).
BTW, I was referring to the artwork size for my custom .xml files 'TheaterMode.Embeded' showing in 'NOW PLAYING' and for my custom 'TheaterMode.List'
Now I only have to do some more editing on my .xml files for lyrics, biography and playlist and everything should be fine.
I'll post some screenshots when I'm done.
Thanks again to all of you .......