A false tail is simply for looks... a fuller tail enhances a horse's back end. I don't know how things go over in America, but here in the Showring, 60% of a judge's opinion of a horse is based on conformation (or should in as it's in the showing rule book.... but realistically its all a game of luck)... if a particular horse has a wispy tail, and it affects the back end in some manner (and can not be hidden with a different length of tail etc), then some turn to fake tails to emphasise what a full tail on that horse should do.
I personally wouldn't use a false tail, but I'm not a huge showing person... I do however get what it does and how it affects the overall picture... if you want to make sure your horse's conformation is presented in the best way, then you''ll use whatever you can (thats obviously legal!) to help your placings... after all, you don't pay out all this money not to get anywhere all the time!
♥ Seoul Searchin' for the Lovebug ♥