I think the current default of not creating home directories by 'useradd' is sub-optimal. If one creates a regular user, shklee usually expects the home directory to be created. Therefore, I think the CREATE_HOME directive should be uncommented in login.defs.
should be all set now in the tree; thanks for the report! Commit message: Enable CREATE_HOME by default (useradd -m option) http://sources.gentoo.org/sys-apps/shadow/shadow-4.2.1-r1.ebuild?rev=1.1