The "detection" that FrontPage extensions are installed seems to be a simple search for the string "frontpage" within the .htaccess file itself. It is not case-sensitive. Any mention of the string "frontpage" in .htaccess will cause cPanel to believe you have it installed, even if it's in a commented line.
For example, this line from a client's Joomla installation was causing cPanel to erroneously assume FrontPage was installed:
("frontpage" word highlighted)
Code:
SetEnvIfNoCase ^User-Agent$ .*(frontpage|getright|getweb|go.?zilla|go-ahead-got-it|gotit|grabnet) HTTP_SAFE_BADBOT
Removing the string "frontpage" from the .htaccess expression fixed this entirely.
In short, if you're getting an error claiming FrontPage extension are installed but they are actually not installed, search your .htaccess for "frontpage" and remove all instances of it. Keep in mind, though, you may need to "fix" some of your expressions/rules when you remove the string "frontpage". In my example, the adjacent OR operator (the "|") had to be removed as well to keep the expression syntactically correct.
NOTE: If you *do* have FrontPage extensions intentionally installed, you'll simply need to decide whether or not you want to use FrontPage extensions or cPanel's .htaccess password protected directories. Either/or, not both. This "fix" is only for people who do NOT have FrontPage extensions installed, but are experiencing the error despite this fact.