That is a scam to get the unsuspecting public to be raising puppies for the breeder.
If you are competing, then that is a way to get a better quality and possibly more competitive dog, that later will be used for breeding, a situation that fits just a handful of puppy buyers, not at all the general public.
As for horses?
With the oversupply today, any one breeder wanting to sell with such restrictive contracts is going to be laughed at by most buyers and they will move on to more sensible sellers.
The reason rescues can get by with that is because of their play on emotions, the horse is being "rescued and needs to be protected".
That can backfire, when buyers will walk on and go look for a horse in other places and so fewer horses in real need find homes.
A fine line dog and horse rescues walk there.