I think you are referring to what Protestants list as the Second Commandment, and Catholics who know their faith, and understand the Sacred Scriptures do follow but is numbered as part of the First Commandment. The problem is that non-Catholics have claimed that we do not follow the commandment because they have been taught that it says something altogeather different from what it really says. They have taken individual passages out of God’s context, and molded it inot their own context.
The commandment does not simply say, “You shall not make for yourself a carved image, or any likeness of anything that is in heaven above, or that is in the earth beneath, or that is in the water under the earth” it actually starts with “I am the LORD your God, who brought you out of the land of Egypt, out of the house of slavery. You shall have no other gods before me.” it goes on to say, “You shall not bow down to them or serve them, for I the LORD your God am a jealous God,visiting the iniquity of the fathers on the children to the third and the fourth generation of those who hate me, but showing steadfast love to thousands of those who love me and keep my commandments.”
Now we can see that when the commandment is united as the Early Church read it, and as Jews prior to 600 AD professed it that it is not referring to the act of carving statues, but of carving them and giving worship to them in the place of God. In accordance to the Bible the Catholic Church does forbid the worship of Statues, or of the Blessed Virgin Mary, of the Angels or the Saints. Only God is worthy of worship. WE can honor or to use the theological term, venerate our Lady, the Angels and Saints, becasue they are now with God in heaven, and have gone through the final purification needed to see Him face to face. We do not see our Lady or the Saints as separated from us, after all they too are still members of the Body of Christ, just as we are. We keep photos of our loved ones (images) and place flowers at the graves of our departed loved ones (which nobody would call worship of them, or the carved headstone where they are buried.) We utulize statuse. paintings and mosaics to remind us of those who having gone before us point in the direction of Christ by the virtues of their lives. We use statues to remind us of their lives because photgraphs did not exist until the Mid 1800’s AD, but statues did, as did paintings and mosaics. Just as Jews used graven images in the manner God commanded them to, and those who followed God’s Law in the Old Testament understood those religious images were not to be given worship, we do not worship statues today.
When we read the Bible as a whole we also see that the Commandment is not as most Protestants tell us a prohibition of sacred art, even the liturgical use of that art, but of false worship. God also commands the ark to be built with cherubim on it, the bronze serpent is ordered by God to be made, and if anyone in the desert is bitten by a snake they are to look at it and be healed. When the Temple is built in Jerusalem God commanded every aspect of it (as recorded in the same Bible which the 10 Commandments are written) various graven, or carved images of angels, and animals are commanded to be built for use in the worship of the temple. So here too we see that we can’t just pluck a verse out of the Bible, and without any other context make up our own rules as to how it is to be interpreted.