>>127599010He basically photobombed the flashback.
>>127598044I think we were meant to see more of the General becoming a father-figure to Rider, and probably her thinking about her relationship to Horse now that her steed turned into a talking person (foreshadowed a bit by her not being convinced Horse could launch her at the Nowhere King in S1's finale). Also more of Horse worrying that she was 'just a horse', partly because the other centaurs knew their world so much better, but then worsened by finding she'd been replaced by Becky Apples. As such, Rider saying the line would have confirmed her fears and added into the plot arc.
As it was, however, it just felt like a weirdly out of place thing for Rider to say. 'Your info must be wrong', sure, but why 'you're just a horse' when she's rallied an army?
And yeah, Rider should have died or been merged with Horse (with it working because consenting magic or something, who knows). The death was genuinely unexpected and sad until they undid it, and merging would have been fine, too (Horse said she 'missed [Rider] like a phantom limb', so that could have been foreshadowing, plus that centaur mythology is tied up with people riding horses).