Step 1: Otosclerosis is abnormal bone remodelling in the otic capsule, classically fixing the stapes footplate and causing conductive hearing loss. Active disease has areas of new spongy bone (otospongiosis) with osteoclastic resorption.
Step 2: Sodium fluoride is given to slow active otosclerosis. It works by promoting recalcification and maturation of the spongy bone and by inhibiting the proteolytic and osteolytic (bone-resorbing, osteoclastic) enzyme activity in the cochlea. So option A is a true mechanism.
Step 3: The drug favours bone formation; it helps convert immature otospongiotic bone into mature dense bone. It does not inhibit osteoblastic (bone-forming) activity. Therefore option B is false and is the exception asked for.
Step 4: Option C is true. Fluoride is excreted by the kidney, so it is contraindicated or used cautiously in chronic nephritis and renal failure. It is also avoided in pregnancy and active rheumatoid disease.
Step 5: Option D is true. A positive Schwartze sign (reddish hue over the promontory seen through the drum) indicates active vascular otosclerosis, and active disease is exactly when sodium fluoride is indicated.
Hence the false statement, and the answer, is Option B: Acts by inhibiting osteoblastic activity.