You are right. The parameter is for installer. PSpad after start detects OS language and if possible then chose corresponding language. If you want to start PSpad after install with German GUI, create simple pspad.ini file and put it into %APPData%\PSPad folder (if no pspad.ini exists).
Ini content: [Config] Localization=DEUTSCH -- <https://forum.pspad.com/read.php?2,79286,79287> PSPad freeware editor https://www.pspad.com