What is meant, according to the scholars, is that Allaah created Adam with the ability to hear and see, and to speak when he wants. These are also attributes of Allaah, for He is All-Hearing, All-Seeing, and He speaks when He wants, and He has a Face, may He be glorified and exalted.
But it does not mean that there is any resemblance or likeness. Rather the image of Allaah is different from that of created beings. What is meant is that
He is All-Hearing, All-Seeing, and He speaks when He wants, and He created Adam also able to hear and see, with a face and hands and feet. But man’s hearing is not like Allaah’s hearing, his seeing is not like Allaah’s seeing, his speaking is not like Allaah’s speaking. Rather Allaah has attributes that befit His majesty and might, and man has attributes that befit him, attributes that are finite and imperfect, whereas the attributes of Allaah are perfect, with no shortcomings, infinite and without end. Hence Allaah says (interpretation of the meaning):
“There is nothing like Him, and He is the All‑Hearer, the All‑Seer”
[al-Shoora 42:11]
“And there is none co‑equal or comparable unto Him”
[al-Ikhlaas 112:4]
So it is not permissible to strike the face or say “May Allaah deform your face”.
End quote. Majmoo’ Fataawa al-Shaykh, 4/226
Another thing that will help to explain the meaning of this hadeeth is the words of the Prophet (peace and blessings of Allaah be upon him): “The first group to enter Paradise will be
in the image of the moon” (Narrated by al-Bukhaari, 3245; Muslim, 2834.” What the Prophet (peace and blessings of Allaah be upon him) meant here is that the first group will be in human form, but
because of their purity, beauty and brightness of face they will look like the moon, so they are likened to the moon, but without resembling it. So just because a thing is said to be in the image of a thing it does not mean that it is like it in all aspects.
https://islamqa.info/en/20652