My pudge would look like a stuffed sausage on toothpicks but those barns sure have some happy horses.
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I think I saw on the comments it was to protect the low men in the herd/ reduce bullying.
I think this will be the set up we end up building whenever we buy a new place (we’re hoping later this year). It would the the open barn with the feed slots, with walls, that opens into a dry lot area which opens either into a pasture or a track. The hay/ feeding barn would have either hydrants or waterers in it but the plan would be to have the water further away (like a track) to encourage movement. I do like the idea of traditional stalls across the way for graining as I haven’t figured out the graining aspect (maybe gates at the back of the hay “stalls” that collapse out of the way to keep everyone contained and grain there, that could be easier?).
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I have to say, I love all the Maddens’ do for their retirees and the great care, but I was always skeptical of the Madden Mountain method of hay feeding. I did not like horses sticking their heads through so much metal to eat. And I really don’t like free access to standing stalls. It’s only a matter of time before a bullying horse decides he absolutely must push his way in to the low man’s stall (I say this from a place of experience).
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In theory (and in practice for cattle anyway) as long as their stocking (number of animals) remains at 90% of available slots, the low animal will always be able to move to a new slot and the pushy bastards eventually give up because either they realize that all the feed is the same or their favourite stall is always available because the others have learned they do not enter that stall when pushy bastards are in the vicinity.
That said, with cattle, the stalls are imaginary so if someone gets bullied they can easily whip their head out and move away to find another opening. I too can see potential problems with the set up in the video.
Interesting. I used to work at a summer camp that had standing stalls in the “pasture” for hay and feed. We were only ever at 90%, but we still had fighting and some gnarly injuries as a dominant horse left their stall to see if the low man on the totem pole had anything “better” in theirs.
Ugh, yeah, horses are not cattle, but I do wonder if horses would be less inclined to get actual injuries if it were just head gates instead of actual stalls. OTOH, obviously they renovated to make it stalls for some reason or other, so, in short, I dunno!
It is a very common system in Europe rearing Warmbloods. The injury rate can not be that high otherwise no one would use it for valuable youngstock.
With the extended standing stalls like in the video above or just with head gates and fully open area behind? I’ve only ever seen open area with head gates and not individual stalls … but I’ve not been all over the place checking barns out BECAUSE THE LOTTERY HAS NOT COME IN FOR ME, DAMN IT!!! 
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Better do the lottery more often!
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One advantage to adding walls to make “standing stalls” is that you can use a stall chain to prevent horses from exiting their particular spaces.
We used a similar system at a barn I boarded and worked at. We had about a half-dozen little spaces set up on a fence line to use as standing stalls for the horses that lived outside. Since we never knew which horse would go in which one, and they were all on individualized feeding programs, I would throw a handful of feed in each feed tub, wait for the horses to all pick a stall, and then add their rations. Then I would go behind them and fasten the stall chains behind them so the fast eaters couldn’t exit and bully another horse. After everyone was finished eating, I would let them out one by one - usually starting with the easy going mellow ones that would just mosey on out to start grazing. I’d let the self-proclaimed “feed tub cleaners” out next and the top bullies out last. The system worked really well - even though there was a mix of horses, ages, personality types, etc. out there, they rarely got into fracases at feeding time.
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