Yes you can feed garlic to horses, in the recommended dosage. If you feed them an excessive amount (5 cups a day in the University of Guleph study) they would have an adverse reaction, however the amount needed as a fly deterrent is much, much less.
Having said that, yes some horses may have a reaction at a lower amount, but if you notice that they’re not quite right and stop the garlic the effects do reverse themselves if caught quickly.
Personally I have used garlic and noticed a HUGE difference in the amount of flies/gnats/ticks on the horses eating it. If my horses would eat it they’d be on it; but they object to anything in a powdered form.