@DidyouNO
An example of a horse who had in some way been traumatised, was a mare I met (and rode a lot) at College.
Something had happened to make her very headshy, so in order to put her bridle on, you had to take it apart and put it on almost piece by piece. She was fine with that. She also had to be allowed to go into the stable first, or she would smoosh you against the door frame in her hurry.
The College was probably not the best place for her, and she really needed gentle handling. I got on very well with her for some reason.
They don't forget, and sometime s a memory of pain, rather than something specific.
Regarding mood/behaviour:
Well, they are prey animals, so are typically in flight mode. But will generally only run for about a quarter of a mile and then stop to look back at what the enemy was. But they will do that quarter-mile at full pelt!
Their ears and eyes are very clear indicators, and the most obvious things to watch - ears alert and pointing forwards, they are engaged and alert, usually to what's ahead. One ear or another flicking back or forwards/to the side and they are listening in that direction. Angled back, they are not happy or are worried , and flat back, they are feeling aggressive for some reason. Coupled with whites of eyes, and watch out.
Worth mentioning is that they cannot see directly under their nose - so when people who are unfamiliar reach out their hand and the horse steps back, they worried - but they are (usually) just trying to see better (and if there is a Polo mint in the outstretched hand).
(I could go on but am sure others may answer questions.)