In order to hide this user from the directory, you will need to enable "allow users to remove their name from the online directory" under Profile Publish Access in Core.

For more information on Profile Publish Access view the Profile Publish Access Help Topic
Note: The steps below will temporarily enable all users to remove themselves from the directory, so you should complete the second set of steps immediately after removing the test user.

To hide a test user from the directory:
  1. Navigate to Core
  2. Select Security > Profile access 
  3. Choose Profile Publish Access
  4. Click Edit
  5. Mark "Allow users to remove their name from the online directory."
  6. Then, click Save in the upper-right hand corner
  7. Next, select Profile from the Users/Access menu
  8. Under Edit User Profile Data, search for the user
  9. In their profile, scroll down past System Information and choose "Select information to be published in the online community." 
  10. Note: If the "Publish to Directories" task is not enabled in the "All School" role, the User will not see this option. Instead, go to Core > People Finder > [user] > Settings and mark the Do not include my name option there. 
  11. Click the Edit button
  12. Mark "Do not Include my name, or any information about me in the directory."
  13. Next, click Save
Now that the test user is removed, we need to readjust the Profile Publish Access so that other users cannot remove themselves from the directory
  1. Select Security > Profile Access again 
  2. Choose Profile Publish Access
  3. Click Edit
  4. Un-Mark the "Allow users to remove their name from the online directory." box
  5. Lastly, click Save
Directory changes do take 24 hours, but after that time the test user will no longer show in the Directory.