I'd say that Harriet is reduced to a private, while Bunter is (and always shall be) Peter's sergeant. Bunter isn't an equal but he is an intelligent agent--he gets told what, but not how. (Old military joke: you're a captain and have a sergeant and ten privates. What is the correct way to guard the perimeter of your camp? Answer: Say "Sergeant, guard the perimeter.")

I never even thought of reading the racehorse passage as anything other than Bunter trying desperately not to imagine Peter and Harriet having sex.

If I wrote more DLS fan fiction I would be inclined, I think, to write the working out of the Harriet-Peter-Bunter triangle, eventually resulting in Peter keeping Bunter as the lover he can order around and Harriet as the wife he can't.