On Lollipop (stock 5.0.2 Samsung Rom) now, set the option as you said (I used a localized, non-fully translated setup and it was just gibberish there, so I figured it's some debug settings), mouse2 still works as "back".
I think I know why that click bug happens.
The application seems to "miss" a click release. I can click down with mouse on a setting and nothing happens. I touch there with my fingers and it works. I think click happens, but click release is lost, having the app think the mouse button was never released. Hence the scrolling side effect.
So, besides that, any other ideas for how to get mouse2 working?
Extended mode does nothing in that direction here.
What input do you use? I know SDL applications should work - ScummVM uses SDL afaik and mouse2 righ-clicks properly in adventure games like The Dig.