Is the master database backup crucial for restoring MS SQL server in the event where you have to restore from backup and build database server from scratch?

NOOOO, do NOT discontinue backup of master! Whereas most apps don't directly interface with the master database, master contains data for the current state of your server, databases, all kinds of things. That is horrible advice, to the point where I would seriously consider dumping their product. That really surprises me coming from a support agent of a backup product.

model is the template database, not master. master is crucial for your server to run properly (ie- at all). If something happens to it and you don't have a recent copy to restore from then your server is toast and you'll need to rebuild, reattach all of your db's, etc.

+1. Wow! The recommendation from Commvault partner support is horrifying. The master database holds the keys to the kingdom (database info, login info, server info, etc., etc). Without it you're effectivley toast. As others have stated, the master, model, and msdb databases should be set to Simple recovery mode and as such, can not have transaction log backups performed, only database backups. If you attempt to backup the transaction log the backup job or maintenance plan will fail on that step. Also, when backing up SQL Server using third party backup software (BackupExec, Commvault, etc.), the appropriate application agent should be installed and used (SQL Agent) and the database files (mdf, ldf) should not be backed up directly at the file level.

From the log messages, it looks like they're trying to run a transaction log backup (BACKUP LOG) on the master database. Master (like model and msdb) is required to be in the simple recovery model, which prohibits transaction log backups. You only need to do a full backup (BACKUP DATABASE) on the system databases.

I would definitely make sure it is backed up regularly - master stores all of the configuration information for the server, and without it, you would have to configure nearly everything from scratch if you did have a major failure. I have heard some people say that master does not need to be backed up daily (it only changes when you make a system-level change), but I do have it in all my daily maintenance plans so I don't forget to back it up.

This advice is exactly like if someone told you to not back up your system state, because you don't need it to rebuild a server if you have all the data. Just plain stupid.

You can of course rebuild a server without the master DB, but you'll then need to reconfigure everything from scratch; this not only means attaching DBs and setting system parameters, but also re-creating logins and assigning permissions.