Use https scheme

Note that the code you see is relevant for Cloudinary’s migration process only and not for already uploaded images nor future image uploads.
For new images that you wish to add to posts, you can set the ‘**Protocol**’ parameter to ‘HTTPS‘ instead of the default ‘HTTP‘.

If you wish to change already uploaded images to be delivered via HTTPS, you can use 3rd party tools like Search and Replace, this plugin can go through your database and alter the URLs. So for example, you can search for all https://res.cloudinary.com/<your_cloud_name>/ and replace them with https://res.cloudinary.com/<your_cloud_name>/. Please note that you should backup your WordPress database before applying this process.

Where can I change this protocol setting?

This is done from within the Media library when adding a new image.
For more information:
https://support.cloudinary.com/hc/en-us/articles/203636892-How-to-deliver-images-via-HTTPS-in-WordPress-

Thanks!