I am not a fan of round bales, especially for only two horses. It might mold before they eat it all. Although 8 x 12 is tight for a stall, if he is in there only part of the day, and eating, he may not mind it. After all, in some places, horses are kept tied in standing stalls. My main concern would be that it would be difficult for him to lie down and sleep. If he had any suitable open space in which to lie down during part of the day, that wouldn’t be a problem.