That's just what the combination of the 34T rear cog and Tourney derailleur looks like. Here's mine, using the 38T chainring:
Using the 28T chainring doesn't move the top derailleur pulley any farther from the cog, so using a longer chain won't make any difference.
It doesn't seem to cause any problems for me, though I don't use the 34T rear cog very often: it's too much of a jump in gear ratios from the next one down, which is a 24T.
However, I don't have the same model of Tourney derailleur as you. Your derailleur looks like the RD-A070 and Shimano's compatibility listings indicate that this is only compatible with freewheels whose largest cog is a 28T.