The "select user" button/icon responds and opens the user search window where a user can be found and selected. The user is added incrementally, or replaced but when you leave the page the changes are not saved.
Using Confluence version: 4.3.3
After some searches, I could replicate the issue and I could find that there is a bug open for it already: https://jira.atlassian.com/browse/CONF-26359
I suggest to vote and watch for future updates and possible workarounds.
Hope that helps! :)
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