Vikas, you can't edit the User Directory that you're currently logged in with. If you don't already have one, create a new "confluence_admin" user in the internal confluence user directory -- don't forget to assign admin permissions -- and then login as that user; now you should be able to tweak the "upgraded atlassian-user..." user directory.
If you use local groups in Confluence you'll have to rebuild your groups because the user directory does not contain your group membership information, those groups are left behind in the "internal directory". You may wish to take this as an opportunity to evaluate the pros/cons of moving your groups into LDAP rather than managing them locally in Confluence.
However, I suggest creating a whole new "<myldap_name> Directory" because the migrated version doesn't always make the best choices for some of the settings.
Disable the existing "upgraded..." user directory and then create your new user directory. Once the sync is complete you can begin repopulating groups, either locally or in LDAP.
This topic is related and may be worth a read: https://answers.atlassian.com/questions/15329/jira-4-3-ldap-migration-from-jira-4-1-1
As always perform these changes in a test environment first!
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