If there's a situation where your image looks like it might fit but the system gives you a warning that it doesn't (and the image does not show on your preview), the image is probably just barely too big.
For example, this is a 14" center layout menu page that should have a large image on the bottom of the page, but we get a warning that the image does not fit and are left with a big empty space at the bottom.
If we draw some lines where the template allows text and images to fit, we can see that the image just barely extends past the space allowed.
If you use an image editor, you can crop the image to be shorter. Otherwise you will need to use less text or decrease your font size.