The wooden horse armor operates much like Roadsign Horse Armor does, only with considerably less defensive statistics to both horse and rider.
In addition to making the ridable horse less susceptible to damage (particularly gunfire), the horse armor also provides considerable projectile protection to the person using it. This additional protection does come at quite the cost, unfortunately, with the overall speed of the mount decreasing marginally.
One perk of the wooden over the roadsign variety is an additional six free pack slots available for storage on the animal while equipped.
Wooden horse armor is craftable by default, with all players inherently knowing the blueprint. It may not be purchased or found in any other way, making it considerably rarer than its roadsign cousin.