Record type profile availability and defaults
Key Takeaway
A record type must be one of a profile's assigned record types before you can set it as that profile's default record type for the object.
Record types let one object offer different business processes, picklist values, and page layouts to different users. A user's profile decides which record types they can pick when they create records, which one is their default, and which page layout they see for each record type. Permission sets can add more custom record types, but they follow different rules than profiles.
What record types are
Record types let you tailor one object for different groups of users. For example, you can offer different picklist values for regular sales deals and for professional services engagements. You can also show different page layouts for support cases and billing cases. Record types are available in Professional, Enterprise, Performance, Unlimited, and Developer Editions.
When --Master-- is assigned, users can't set a record type on a record, for example during record creation.