We had a similar experience with my sister’s outgrown Pony Club pony about 20 years ago–was out on a free lease to another PC family a state over.
We had done the same thing with my pony and it worked out well, so felt comfortable with “return home when outgrown, etc”; the people loaned him to someone else, who passed him on… lost track of him, shunted him to an equine therapy facility, jumper pony was too spicy for that job, pony went to low-end auction and ended up with dubious bail pen/rescue group (CBER).
The Pony Gods must have been on his side, because a friend saw him, recognized his name and called me. My mom was close enough to go retrieve him (she said he whinnied and came running when she called him) and he finished out his days with them.
That really scared me --you think you have all the safety nets in place, everything is good, and the pony falls off the face of the earth. There is really very little recourse and it’s very easy for even a once-fancy pony with an actual owner to fall through the cracks.
The last time we checked on him (we were volunteering at a Pony Club event) we should have just tossed him in the trailer and taken him home. I really regret that. He was was fed and sheltered, but he just didn’t seem loved/valued. Bothers me all these years later