If the "School Name" field is unselected in the Profile Form, the box is automatically selected again upon saving and displays on the form. The School name field cannot be unrequired.
This behavior is normal. The reason why this happens is because the "School name" field is connected to all other Primary Alumni fields on the Profile Form. If any Primary Alumni field is marked as "Include" on the form, the "School name" field will be marked as included as well.
Please note that the "School name" field in this part is required due to it being a required field for all Education Records in The Raiser's Edge. This behaves in this way because it is a database requirement.