Solution :

As the error suggests, we can’t set an undo tablespace as default tablespace for a user.
We can get the type of tablespace by using below query.

SQL> select tablespace_name,contents from dba_Tablespaces;

TABLESPACE_NAME CONTENTS
------------------------------ ---------
SYSAUX PERMANENT
SYSTEM PERMANENT
TEMP TEMPORARY
TEST PERMANENT
TEST_2 PERMANENT
TS_CRM_EXTCH PERMANENT
TS_GGATE PERMANENT
USERS PERMANENT
UNDOTBS1 UNDO ------ >>>>

So just use a tablespace with PERMANENT type,

SQL> alter user Testuser default tablespace TS_GGATE;
User altered.