your page is missing the Server Validation server behavior.
Between creating the form and applying the insert record behavior, the server validation code got deleted from the page somehow.
you would probably be best off starting the form from scratch.
Create the form using form builder, then test to make sure the validations work. at this point, make a backup of the page before applying the Check New user name and Insert record behaviors.
make sure that code view is not enabled, I have seen server behavior code get overwritten if code view is enabled.
after adding the check new user name and insert record behaviors, double check that the Server validation code is still on place.