A defect represents an error, flaw, failure or fault. It means that the System Under Test (SUT) produced an incorrect or unexpected result. All the issue types mapped as Defect Issue Types are handled as defects.
The project administrator can choose which of the available issue types should be handled as defects by dragging the available issue types to the corresponding target box.
Example of a possible setup
Don't forget to save the settings whenever you add an Issue Type to the Defect Issue Types box.