For now, to get the behavior you want please move testuser to user-data.
Identity is not required if you're supplying user-data.

The merge of config today isn't sophisticated enough to do something
like merge the identity section user into user-data.

FWIW, the docs at https://ubuntu.com/server/docs/install/autoinstall-
reference look a bit misleading and make it sound like you'd get OK
results with both, but today you definitely want to send all your users
through user-data.

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https://bugs.launchpad.net/bugs/1945023

Title:
  autoinstall/user-data/users block has no effect at all in live-server
  20.04.3

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