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The Test Defenses (aka Defense Simulator) is a feature the allows players to test their defenses without loss of medals for a fee of goo. Players are allowed to select monsters at a matched level and drop them in as if attacking their own base, with the option to call off the attack at any given time. To activate the Simulator, just click one of your defenses (Except the walls) then press "Test Defenses" button. This is useful for finding weaknesses in your base, then try to resolve them and trying out different tactics without attacking other players. It is recommended to test with high amount of Goo for the later monsters. Upgrading your Housing will increase the effectiveness to test strategically.
When you recently unlocked a monster (Not upgrading), you can test the next monster that is still locked after it.