The way "I see the diagram" it looks weird, but it is probably correct.
My perception is that it is about frames of reference. We are used to seeing the Earth with Earth's north at the top, not at 23.5 deg from the vertical.
This picture has the ecliptic pole at the top. As you state, Earth's equator matches the celestial equator. The Earth's poles would ...
As others have said, a single set of coordinates gives a point rather than an area.
However, I assume that the intent of the question is an understanding of the precision of these coordinates - i.e. what's the area covered by the 1"x1" shape comprising all of the lat and lon values that would round to a whole number of seconds. The answer to that is "it ...
A point do not have an area.
A point is a 0-dimensional mathematical object which can be specified in n-dimensional space using an n-tuple (x1, x2, ..., xn) consisting of n coordinates.
The area of a point cannot be calculated. So the area must be null.
As I see it, the Earth is well oriented, but due to (over)simplification the drawing of the geographical features may be misleading. The aspects that show that the North Pole is not upwards but tilted to the right are:
The Mediterranean sea extends basically in an East-West direction. The (simplified) Mediterranean here is clearly tilted and not horizontal.