I've ranted about the horse issue, myself, on a number of occasions, but it's pretty much keeping in line with the fact that one of the prerequisites to being a guard is to have mastered the arcane art of precognition. They know when you've committed a crime even if the people around haven't had a chance to report it. Either that, or all of Cyrodiil is one huge hive mind, with just a few exceptions (the PC being one of them, of course). I think it's all part of a Bethesda conspiracy to virtually enforce the PC to walk the path of righteousness to actually accomplish anything important in the game -- or what they consider important which is staying out of trouble long enough to complete the main quest. Frankly, the entire main quest line is so disappointing that it's the very least of my priorities when I'm playing this game. I love playing either (or even both) sides of the fence, but I can get my "good" fix with most of the quests that are available without having to struggle with a lame premise and NPCs who are getting in the way when I'm trying to fight. I lost count how many times I had to restart sections of the main quest because of some NPC who jumped in the way of a sword blow or targeted spell after I had fully committed to it. The AI is really stupid like that. Or the designers did it on purpose just to make things difficult for the player.
There's not really, by comparison, that much for the player who wants to role-play a darker character and, ultimately, the darkest quest line (the Dark Brotherhood) teaches you what? That the Night Mother, herself, cares so little about her followers that she knows who the traitor in the organization is and still allows the entire Cheydinhal Sanctuary to be slaughtered and her very own Listener put to death in a most grizzly fashion, even though none of those people were involved in any way with the treachery? That was a pretty frustrating part of the game for me, too. It was too contrived. Too ... irrational. I so wanted to murder the Night Mother, in fact, even though I knew it would be pointless to try.
I could go on with frustrations, there are so many of them in this game, some caused by poor game design and some caused by a perverse sense of humor by the game designers. If, like me, you like to play basically good characters who can sometimes get drawn into darker paths, you probably approached Borderwatch with a feeling of dread, knowing that you were going to be permanently ruining the lives of the people, there, just to play a silly prank on them. This wasn't like the other "prank" quest in the Daedric shrine quest line, which was great fun, even if the mechanics of the game bugs it to the point where you sometimes can't actually follow through with it, but Borderwatch is serious business with far-reaching moral and ethical consequences. But if you want to complete the Daedric shrine quests and get a chance to acquire that lovely book that is its culmination, you have to. I did, I felt bad about it -- really bad to the point at which I'm thinking about creating a quest mod that lets the PC atone for this great injustice -- got the book and then the game refused to let me read it! Nothing I did could get me the option to read the danged thing. I finally gave the book to Martin in lieu of Wabbajack, which everyone claims is the most useless of the Daedric artifacts. The ONLY reason I completed the Borderwatch quest was to get that book, and then I was denied its use.