Below solution worked for me!!
It is not possible to update single user via UI
But you can update the service principal as the signle user via databricks cli.
1. install databricks cli

2. run command databricks configure

3. run command:
# Execute clusters edit Command to Set Service Principal as Single User
databricks clusters edit <cluster id> <spark version number>--cluster-name "<cluster name>" --data-security-mode SINGLE_USER --single-user-name <client id of the service principal> --num-workers 1 --node-type-id <node type> --no-wait