It appears that even though watermark settings detects that image gallery is not active and produces a message something like, "This option is disabled because Image Gallery is not enabled," watermark simply doesn't apply itself if Image Gallery is not enabled even if it's not required/used.

Steps to reproduce:

  1. Verify that watermark is operational: enable modules Image, Image Gallery, and Watermark, and configure watermark (do not create any image galleries)
  2. Create content>>Image, check Apply Watermark. Click Submit. You should see your fancy watermark.
  3. Disable Image Gallery in modules admin screen.
  4. Create content>>Image, check Apply Watermark. Click Submit. Hmm.. no watermark!

Can someone please verify?