Not sure what you don't understand, the way I read that is if you use the '-n' option with useradd - the user will be added in what ever is defined in /etc/default/useradd.
On my RHEL 5 system my /etc/default/useradd file contains GROUP=100. So users added with -n will go into the default group 'Users - 100'. Which is the default on other distros I think.
If that parameter was NOT in the /etc/default/useradd file - then the default group would be 'bin - 1'. Which would not be a recommend group for standard users.
So make sure you have your default defined correctly in /etc/default/useradd when using the option -n.
Unless I'm missing something?