The main gimmick of this game is that the field and the images have no defined edge. As the image is tiled in both axes you can connect pieces through what looks like the edge of the playing field. In this case the solution is to move the top line left by one tile to match the parts of the blue fella. (pieces dragged outside of the field will appear on the other side, groups of tiles don't get broken up by that)
This issue has been brought up quite a few times as a bug so far and it is almost impossible to deduce that this is intended behaviour from just playing the game. I will definitely be adding a tutorial for this aspect of the game prior to the final version of the project!