The opening loading screen should show TMO somewhere on it. I assume Ducimus made a special loading screen for it. All the supermods I've seen have there own loading screen.I've never used that early of a version of TMO so I don't know what the screen may look like.
Sounds like it may not be activated by what you posted.
On the opening menu it should show a CREDIT or TMO selection? If so, click it and see what it says.
I'm going to assume too that TMO 1.7 is compatible with v1.4 of SH4. I believe later versions are only compatible with v1.5. I'm not sure what version that requirement started.