We have marked the Undecided milestone as unassignable, but cases can still be assigned to it. Imo this is a bug since at this point FB does not work as expected.
I can see that for system generated cases (eg receiving email) a default milestone is necessary and that Undecided serves this purpose. But I would rather have the ability to specify my own default milestone.
The Undecided milestone is built-in. Either it should be impossible to make it unassignable or it should disappear if it's not assignable, so yes, either way, there's a bug and something that needs to be decided here. I'm marking this status-evaluate for the FogBugz program manager to come look at this.