If it’s outside of the breeding season, I don’t think you can change a horse’s status to stallion. I believe it was something Shanthi set up to avoid you being taxed twice for the same horse. If he’s met the criteria, you should be able to change his status from 1st January.
Indeed. Taxes are irrelevant at the moment (but will arrive again eventually), but it’s setup so that you can’t retire a horse to stud outside of the (end of) the breeding season since you can’t breed him anyway.