Answer: the picture does not represent the electron in the orbitals but the electrons in the principal energy levels.
Step-by-step explanation:
I managed to find the picture with the model referred on your question.
To figure out what is wrong with the orbital arrangement you must do the electron distribuition for the nitrogen atom.
That starts with the atomic number. The atomic number for nitrogen is 7, that means that it has 7 protons and 7 electrons.
Orbitals only deal with electrons. So, you need to focus on the electrons and their distribution.
The electron distribution for 7 electrons is: 1s^2 2s^2 2p^3.
That means that two electrons are on the orbital 1s, two electrons are on the orbital 2s, two electrons are in one orbital 2p and one electron is in other orbital 2p (remember that there are three 2p orbitals, 2px, 2py and 2pz).Those are four orbitals, but the picture shows only two levels (circles around the nucleus).
The levels shown on the model of the picture do not represent orbitals but levels of principal energy ( the principal quantum number). So, the two electrons on the smaller circle are the electrons 1s^2, and the 5 electrons on the larger circle are the electrons on 2s^2 and 2p^3.
Then, what is wrong is that the picture does not represent the orbitals (which are 4, the 1s, the 2s and two 2p) but the principal energy levels (wich are two the number 1 and the number 2).