According to the online doc, it depends on whether you request the use of a Thin or OCI/Thick JDBC driver. Just go to Help > Search, key in Kerberos and you will easily find the following info (under SQL Developer Dialog Boxes and Wizards > Create/Edit/Select Database Connection).
For the Thin case, go to Tools > Preferences > Database > Advanced and fill in the blanks in the Kerberos Thin Config section. Click on the Help button for the documentation. For Thick driver use, configuration is done through sqlnet.ora (sqlnet.authentication_services=(KERBEROS) and related parameters.
And if you read this blog ... The long long route to Kerberos | Laurent Schneider
you will see a recommendation to use OCI/Thick, or else replace Tab characters with spaces in the krb5.conf file.
Hope this helps,
SQL Developer Team
Yes that was it. I went to Tools -> Preferences -> Advanced Parameters and checked the Use OCI/Thick Driver box. And it works.
BTW, for some reason I though my initial query had got lost somewhere so I resubmitted it - that's the reason for the duplication