You are correct! The image is grainy and does not comply with the quality criteria of Adobe. It seams to me that it is an old Fotolia image from early days. And I agree, it's barely usable and it should be disabled.
It is, however, normal that the preview is of better quality as the noise level is one of the characteristics of a picture that gets enhanced when you reduce the image size.
An image like that would not make it today into the portfolio.
You are welcome!