I was just reading the documentation for the CREATE TABLE statement and it says this in relation to the DEFAULT clause:
"The DEFAULT expression can include any SQL function as long as the
function does not return a literal argument, a column reference, or a
nested function invocation."
Yes, it is OK to use literals with DEFAULT, for example DEFAULT 'YES' . What is telling you that text is that if you are using a function in DEFAULT, for example
DEFAULT POWER(2,3) , that function POWER must not return a literal argument. You can use SQL built in functions in the clause DEFAULT , but not USER defined PLSQL functions