The judge did NOT comment that braiding is not allowed. That would be different.
If you want to braid the tail...than do it. But most do not. Same with eventing. There will be some braided...most will have their tails pulled or trimmed and a few will do nothing.
A schooling show is all about schooling...and learning. Having a judge make a comment like that is TYPICAL. At a rec. show, you probaby wouldn't get any such comment....but at a schooling show I would expect them as the intent of the schooling show is to learn more than compete.