Does anyone have any idea why my 95% potential horse is better than my 100% potential horse?

Yasmin

It is the hidden stats.

If you are in league mode you can't see things like extra speed, cruising burst etc..

There are also stats that are hidden even if you are playing in "normal" mode.

Would you suggest breeding with the 95% horse or the 100% horse?

I would breed with both.

The quality of the mares in the barn would influence my strategy.

If the 95% stallion produces some good 95% mares, I would then try to combine the best of two things. The 100% stallion and good 95% mares may produce good 98% mares. Maybe even a good 100% stallion if you lucky.

Although it is a little in-breeding, I would then try the good 98% mares with the poorer 100% stallion and again hope to combine the best of both.

In SO7, I have found that only 2% of the foals I breed go on to be any good, so don't give in if the first crop of foals doesn't work out.

Also, some of my biggest increases in horse performance has come from using gamebred stallions in the barn.