Steps to reproduce:

Create a user from the REST web service, e.g.

wget -O - http://yourmoodle/webservice/rest/server.php?wstoken=<yourwstoken> --post-data="wsfunction=moodle_user_create_users&users[0][username]=test01234&users[0][firstname]=Test&users[0][lastname]=Account&users[0][email]=test01234@example.com&users[0][auth]=manual&users[0][idnumber]=01234&users[0][city]=Perth&users[0][country]=AU&users[0][password]=<somepassword>"

The first time you submit this data, you will get a response like the following:

<?xml version="1.0" encoding="UTF-8" ?>
<RESPONSE>
<MULTIPLE>
<SINGLE>
<KEY name="id"><VALUE>99</VALUE>
</KEY>
<KEY name="username"><VALUE>test01234</VALUE>
</KEY>
</SINGLE>
</MULTIPLE>
</RESPONSE>

Submit the data a second time.

Expected result:

An error message that indicates the user already exists

Observed result:

<EXCEPTION class="invalid_parameter_exception">
<MESSAGE>Invalid parameter value detected, execution can not continue.</MESSAGE>
</EXCEPTION>