I can imagine a really brutal ride by a bad trainer on a young horse, making long-standing problems. Also a bad fall jumping or a wreck driving, as others have said. Or a spook into traffic or other trauma.
I can also imagine owning a well trained horse and saying exactly what the OP reports, as a way of keeping all the fools who wanted to “see what it’s like” off his back.
But I expect that the experience of riding that horse, for someone who didn’t know what they were doing, would just be weird. They would probably find the horse too hot or forward, and then they’d get freaked by lateral movements they didn’t understand. Or they would just walk around on a loose rein, terrified.
It is true that a horse has to be ridden correctly every single minute, or else it’s training and attitude suffer. That is true of every horse. Now “correctly” can include a relaxed walk on the buckle. It can include a trail ride. But you still want to have everything correct.
As far as making “one mistake ever” in a move, that would depend, I think. If you made a mistake and the horse couldn’t read your cue, and didn’t do the move, that’s a fail but maybe no real impact. If this made the horse confused and angry, that’s more of a problem. And if you reacted harshly, hauled on the face, tried to force the horse into a move, and it blew up, that’s going to be more of a problem.
Since I’ve started trick and clicker training, I’ve seen how fast a horse can learn something and how long it can remember, and how hard it can be to undo something! I’m talking mostly about little things, like if I rewarded her for something on the trail, she will stop and look at me expecting a treat at the exact same place every day for a week or two. But also bigger things; if we have a fight at a particular place in the arena one day, she will balk there the next day for sure.
So if I had a highly trained horse that was on a performance schedule, no way would I let other folks ride. Indeed, even with my moderately trained horse, I am very careful who rides her. I’ve let complete beginners ride her in lessons with my coach or on a leadline with me. But I’ve only actually ever let one intermediate rider take her out alone, and only after I was sure said rider wasn’t doing anything that would upset the horse. Rider didn’t even try to get our more advanced stuff (collected trot, lateral moves), but was correct in what she did ask for and wasn’t harming the training. Someone who hung on the reins or bounced in the saddle would have really messed maresy up.
So extrapolating from that, I’d say the Grand Prix owner is right to err on the side of caution.