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From the Model Mayhem FAQ:

How am I over the photo limit?
When you subscribe, upload photos to your new limit, and then downgrade, your photo limits decrease accordingly. If you have a lot of images in your Unassigned folder when you downgrade, you will see this message.

In order to add new photos to your portfolio, you can either upgrade again or delete images from your portfolio until you are under the limit of your new membership level.