In my Magento I've created two store so we have now these stores:-
My commercial url looking good but I want to remove default from these stores :-
deault and url www.mysite.com/deault
retail. and url www.mysite.com/deault/retail
If I disable :"Add Store Codes" to Url = no then commercial stores stops working.
Here's an explanation for how to do it:
Basically you need to manually create the subdirectories and put modified copies of the files index.php and .htaccess inside.
But this assumes that you run the 'default' shop directly on the domain top level directory. Another Stackoverflow post that could give insight into the settings:
Multiple magento stores on single domain