I'm unclear as to the problem you're having. Are you referring to the front end or being able to select the backend options?
If the front-end, have you defined the language strings for the MOD_SCLOGIN_FORGOT_LOGIN, MOD_SCLOGIN_FORGOT_USERNAME, and MOD_SCLOGIN_FORGOT_PASSWORD keys?
It might be easiest if you take a screenshot to explain the problem you're having.
Thanks for helping us understand the issue. I don't have a good solution for you. With the built-in Joomla language system, those options show properly. You may want to contact the Falang developers to help them investigate the problem further. I don't see what we could be doing wrong in SCLogin as we are using translated strings and the standard XML parameters file for configuring the SCLogin module.
I hope that helps point you in the right direction, but if they aren't able to determine the problem, let us know.