Ok I did a test on this. I don't have the Adequation Localization extensions installed, so I'm not sure if that makes a difference or not.
I have a 5.2.1 install with Url Master installed. I installed an extra language pack (fr-CA) using the admin->languages page. On that same page, I selected 'language settings' and unchecked the 'enable language parameter in Urls'. I restarted the application after this, to make sure everything was OK.
I then go to the home page - all of the pages work as I would expect, and the Urls don't have the language modifiers in them. I can switch between the different languages using the 'flags' and the correct language items display. There are no language modifiers in the Urls at all.
On one page I have a News Articles module. I've added in a news article, and as you have reported, I get a 'language/fr-CA' in the Url for the News Article.
However, when I disable the Url Master module, I also get the language modifier in the Url for the News Article - in fact the full url is http://test/dnn521/Page3/tabid/61/articleType/ArticleView/articleId/1/language/fr-CA/Test-Article.aspx
Do you get the same results as this? ie, disable the Url Master module and the News Article module still puts in the language modifier, even though the 'language in url' option is switched off? It might be something to do with the News Article module itself. It is DNN / Third Party modules which control the provision of the 'language/xx-XX' in the Url - the Url Master module doesn't decide on when and where to insert the value.