So basically, "prospect" is a complete gamble...
Yes. Although, buying a horse is always a bit of a gamble, less so, if you do all your homework!
Prospect, is a legit term, in my opinion, if the horse has breeding, training, ability and conformation to suggest they might be successful at doing whatever the owners is touting them as.
If a 4 year old QH is cow-bred and has been sent to a reining trainer, I wouldn't consider him a barrel prospect, even though he may have the build/speed/power to potentially be good at running barrels.
If however, he had been sent to a barrel trainer, I would consider him to be a barrel prospect and *possibly* a cowhorse prospect, depending on his build and abilities.
Basically, it's a very subjective term. I wouldn't give it much value, unless a breeder (a well respected, legit breeder) or trainer (legit, well respected trainer) told me a certain horse were a 'prospect'. Otherwise, it's probably just a marketing tactic.
Good luck on your quest for a foxhunter!