You might hear a horse person refer to a horse as "unblemished." Or they say "Well, it's only a blemish."
A blemish is any permanent mark or scar that affects the appearance of a horse. Blemishes can matter in the show ring, but they don't (by definition) affect the animal's soundness or performance. A blemish can, of course, lower a horse's price.
Blemishes include bony growths that don't affect action or performance, such as splints. They also include white marks caused by scarring, which are often the result of ill fitting tack having been used on the animal in the past.
Although it looks awful, the skin damage on this horse's leg was caused by a past disease and would still be considered a blemish, albeit a very severe one!