The commandment reaches deeper than statues of wood or stone. Every fixed picture a person carries of himself is a graven image. When someone decides he is poor, or unloved, or the sort who always loses, he has carved a likeness and bowed to it. The image then governs his days. He calls the result fate.
The warning is about the imagination, which is the workshop where all forms begin. To hold a rigid picture of what is and cannot change is to worship a thing carved by yesterday. Life stays fluid until a person freezes it with an assumption. Nothing outside a man holds him where he stands. Only the still image he keeps repeating does that, and that image can be set down.