That's correct, it's pretty common in Puyo Puyo games made by Sonic Team/SEGA to split these portraits up into parts if a pose is particularly long horizontally (Draco's outstretched arm being a perfect example) and then layer them at run time to create the full pose. It seems redblueyellow made a couple of mistakes while stitching the separated files together, as Klug's hand in his outstretched arm pose is also misaligned.
I'll submit a revision that corrects these two errors.
There's also some missing assets here as well, if my memory serves me right, I'll have to play through again and try to remind myself, but I'm fairly certain there's both a thought bubble and missing particle graphics for Ecolo. If I come across anything missing here, I'll upload another revision with the additional assets.

Why is Draco's arm so long? I checked gameplay footage, it's not meant to be that long???

I'm assuming the sprite is split into two in the files, and was sticked together incorrectly for this sheet.