pizzadequeso
It appears as an option when you take a screenshot as ShoulderSurfin mentioned and tap edit. In some gallery apps (e.g., Fossify), Markup can also be selected when you tap edit.
As far as I know, this doesn't work within standard AOSP apps "Gallery" and "Files" (in Gallery it will open Gallery's own editor and using the share with button in "Gallery" or "Files" Markup won't show up as an option).