IMO it is probably the beginnings of some arthritic changes. Were it my horse I would probably have the vet out to do a simple flexion test and recommend a course of treatment to help keep your horse more comfortable as he ages. Because at this point the joint is obviously acutely inflamed I wouldn't say no to an intra-articular shot of corticosteroids either. The IA shot, flexion test and call out fee might amount to a few hundred dollars, but then you will know what is wrong, how to treat it and have a happier horse for it :)
They say money doesn't buy happiness -- well happiness doesn't buy horses!