Text placed on a user: page by this extension for me was not wikitext -- {{user}} was consequently not executable.
Topic on Extension talk:Create User Page
By default, the extension places an invocation of a template named "User" on the page (with the wikitext {{User}}). If you want to accept that default, you will need create page Template:User and populate it as you wish. Otherwise, you can use the $wgCreateUserPage_PageContent configuration variable to set the default text to whatever you want.
If you are seeing something other than {{User}} on the page by default, I will need more information (what extension and MediaWiki versions are you using, what is your configuration/environment, what *exactly* are you seeing) in order to diagnose the problem.
A patch was just merged that may fix this problem. There was a problem that only affected MediaWiki 1.29+.