Check if $(2,\pi/2)$ lies on $r=2\cos(2\theta)$
Plugging $\theta=\pi/2$ gives $r=-2$
Plugging $r=2$ gives $\cos(2\theta)=1\Rightarrow \theta=n\pi$
However the graph shows the point lies on the graph. I know this has to do with multiple representations of the same point, but couldn't proceed further. Any help?
If the coordinates are in Cartesian form, then you are correct. The point does not lie on the graph. If they are in polar form you can refer to Yakov's answer.
If the coordinates are in Cartesian form, the blue point on your graph is at $r = 2, \theta = \frac{\pi}{2}$. Converting to Cartesian form we have $(r \cos \theta, r \sin \theta) = (0,2) \ne (2, \frac{\pi}{2})$ where $(2, \frac{\pi}{2})$ is in Cartesian form.
If they are in polar form, then you can substitute $r$ and $\theta$ to verify that $2 = 2 \cos \left(2\cdot\frac{\pi}{2} \right)$. What you have actually shown is that there are infinitely many points which are on the curve in the range when there is no restriction on $\theta$. However, by restricting the domain to $[0, 2\pi)$, there is only one solution to the equation.