ApiQueryUsers defines the username as type user, which means that passing an invalid username results in an API error. Given that this API module is typically the one that gets used to process users whose names come from user input (such as signup form username validation), that is unfortunate. Maybe the API would be better off with text type and an invalid attribute used for that username in the result data.
In the specific use case stated here, you're only submitting one name and could as easily interpret the "usbaduser_ususers" error in the same way you'd otherwise interpret an "invalid" tag in the results.
That's not to say this proposed change doesn't have merit on its own, though.
Yes, it is not hard to fix, hard to realize it needs to be fixed and not make a mistake, though. The signup username check has been broken for years without anyone noticing, and signup is one of the more scrutinized workflows.