You can read the full article at Why And How Do I Clean My Horse’s Sheath? - AAEP
but here is a snippet.. Myth #3: Swelling in the sheath and tail rubbing are signs that a horse’s sheath needs cleaning. When a sheath swells, it has nothing to do with the accumulation of smegma inside it. -Because of its location on the underside of the horse, it is simply a natural low point where excess fluid is drawn by the force of gravity. For example, an older horse with low protein levels in his blood or liver disease may experience fluid buildup, called edema or pitting edema—swelling that holds a depression when you press into it with your thumb—in the sheath area without exhibiting any other clinical signs. In such cases, the swelling likely will disappear if the horse is turned out or exercised, just as it would from the legs of a horse who stocks up when stalled for long periods of time. Another common cause of sheath swelling is parasites. Parasites also make horses’ tails itchy. So if you notice your horse rubbing his tail and he has a swollen sheath, the latter condition isn’t causing the former. Both can be cured by deworming with an ivermectin-containing product.