The logic behind this intrigues me. The display of the stallion indicators is for competition purposes. Most stallions at competitions are well trained and behaved enough to be able to compete and perform in the midst of distractions such as silly mares in season, bored geldings wanting to pick a fight, the horse illiterate general public who are attracted to your hunk of a horse, who is a hunk of a horse by the very nature of his testicles, wanting to feed him half their gluten laden lunch. The stallion identifiers won't change a stallion's behaviour. If a stallion is so ill-mannered as to be a danger to all and sundry, then he quite simply should be banned from the competiton and sent packing home, with his negligent owner in tow. Most likely, such a naughty boy didn't make it onto the float to get to the competition in the first place, to be able to wear his markers of ballsiness.
Most horse people don't need a plastic disc to tell them the horse in the queue in front of them, or the stall next to them, or the float beside them is a stallion (nope that huge crest is not an implant!). One would hope that most horse people would be aware of their own actions in handling themselves and their own horses around stallions. And if not, one would hope they would ask the stallion owner for advice and guidance if they find themselves based beside an entire. But as I said, most competition stallions are very well behaved, and need little special consideration from others. This regulation suggests to me how much "commonsense" knowledge has been lost in horse management in the last 20 years or so, and how risk management policies and procedures are currently perceived.