... I got here in connection with another one. Apologies for the resurrect.
The pic looks to me like an artists representation of a Hartle-Hawking (or similar) model. These models have finite, boundaryless space with the time boundaryless in the past. (There is probably a better way of describing this but I haven't had my coffee yet.)
Isn't that what the funnel-grid in the pic is representing.
The lines going left to right (ish) represent time, while the
circles represent space but only one dimension of space is being shown. So, in this model, space is not infinite, but loops around on itself. If you travel far enough in one direction, it says, you will eventually end up back where you started.
The artist has added some misleading details to make it more dramatic - for eg. the funnel of the Universe has been enthusiastically filled with all manner of objects ... this is wrong: there is no "space" in there for those objects to sit inside of. The artist also shows the quantum-fluctuation stage as a bright light shining in all directions ... including into the blackness
outside the Universe which is also nonsense: there is no outside to the Universe: that is what "Universe" means.
I think we are not supposed to pay much attention to the pretty pictures - they are supposed to accompany the picture not be literally part of it. It is like those QM energy-level diagrams that also put the wavefunction on the level - using it as a horizontal axis.
Viewed like that - OPs question is suddenly easier to answer:
If space-time is flat (on large scale), why then does this [above] picture show curves?
...because, in this model, the
very-large scale space-time is not flat.
Consider:
... on the short-scale, the surface of
the Earth is curved because it has hills and stuff on it.
... on the large scale it is flat because all the hills go up
and down about the same amount and large areas without any hills are very flat to look at;
... on the very-large scale, the surface of the Earth is a sphere.
So it is with space and time.
This model proposes a spherically closed space with a curvy time that becomes a semicircle right at that nipple in quantum-fluctuations. If you could move backwards in time and kept going in that direction long enough, you'd find yourself heading back forward in time but on the other side of the Universe - much like if you started out going south, and kept going in a straight line, you'd eventually find yourself traveling north on the other side of the Earth.
It is also possible to model the Universe as having
infinite space ... but harder to draw.