Is this an example of a type-0 grammar that is not context-sensitive?
The language you state in the question, $L=\{ a^+b^+\} \cup \{a^* \}$ is is regular (even though expressed via a context-sensitive grammar) and thus it is not undecidable. 

To generate an undecidable language, you can think of a Turing machine for that language, and try to simulate the behaviour of the TM by the grammar. For instance, the nonterminals can be the TM's state (and their position in the sentinel clause will be the head's position). Now a move of the head can be described by grammar transitions of the form $aQb \to Qab$ or $aQb \to abQ$, etc.