If your neighbor had worked for me, had indicated that he had any kind of a master's degree, and I found out later that he had only a bachelors, I'd fire him so fast his head would spin.
If I needed someone with a master's degree and you applied for it, telling me that you had had that master's all along, I'd probably check to confirm you really had it but once I'd done that, I wouldn't hold it against you.
This is just me: I'm not speaking for all HR managers. I personally do not have a problem with your leaving irrelevant information off an application. Since I've been working contract positions for the last seven years, I have on occasion had to take jobs out of the HR field to keep the bills paid when the contracts did not follow immediately after each other. My HR resume does not reflect those jobs. However, when I'm completing an application which says things like penalty of perjury at the bottom, I verbally inform the recruiter or manager about those jobs and ask if they want me to include them, and then follow whatever their preference is.
But when someone here asks a question as to whether they should or should not include such and such a job in their application, I remind them that if the employer in question should find out about the omission, it is legal for the employer to fire/not hire them on the basis that their application was falsified. I, personally, do not consider an application falsified if the omitted information is not relevant to the job at hand, but I am not all HR managers. I also remind them that it is much easier to find out about other jobs than one might think, and tell them about the day that I was introduced to my just-hired new boss only to find that he was my father's next door neighbor.
But you are talking about education, not other jobs. While not impossible, it's not going to be as easy for information about your education to fall into an employer's lap, and in this job market I can certainly understand why you wouldn't want to price yourself out of the market, as it were. On the other hand, Beth has a point that you could accidently eliminate yourself from potential promotional opportunities by doing so.
See why I said it was neither good nor bad? There are both advantages and disadvantages.