I have always had reservations about the chieftain putting his 'bit' in the mare. It may have happened, just wouldn't accept it as proven historical fact; it just seems too convenient for the author, given his (perfectly understandable) motives.
While I seem to have a (deserved?) reputation there about being too much critic on sources, when we have too few of them and no material traces (which would be hard to have for this kind of rites) I tend to follow them would it be because it's the only thing we have at disposal (which doesn't exclude caution, of course).
Because what they tells us seems outlandish to us, people living centuries afterwards, doesn't mean something is wrong. The "world moved on", indeed.
I would even tend, considering the intronisation nature of the rite, that outlandish may be expected : it's not part of the daily life, but an act of establishing power which especially in the sacred gaelic kingship and the marriage with the land, could tend to push a bit the concept with a horse.
(Or not, but you gotta admit, there's room for that).
Now, was it convenient? Certainly. But that doesn't mean it have to be wrong : using more (relativly speaking) exemples, we could argue that human sacrifices never existed in Gaul or in Mesoamerica, because their conquerors definitely used as justification of conquests. And we'd be wrong.
That the rite was misunderstood (on pruprose or not will probably remain unknown) is a good possibility, would it be only given the relativly limited exchanges before the XIIth century. But calling it a forgery is one step I wouldn't make without more evidence or analysis.
If you haven't read this already, here's a link to a decent paper exploring another native source. I'll add the caveat, though, that it'll take about 20 minutes to finish. Though the author makes some rather large leaps to conclusions (especially in regard to equine hanky-panky), nonetheless it makes for interesting reading.
That's really interesting, thanks, even If I struggled for the gaelic sources parts on which I have to rely on the author giving my lack of knowledge on this period : I'm far more of a EMA continental western Europe myself.
The leaps to conclusions may certainly ask for more analysis (and implies the possibility of median sources between BMD and Gerald,
if we doubt the permanance of the ritual up to the XIIth century) but tying up two different sources on a same subject doesn't seem that problematic (unless we consider one of them as dubious from the beggining, but that create more problems in turn).