The graphic representation on the right shows the 'step' behind the 3rd molar (called the 4th premolar).  The typical cause of this is the fracture of one or more caps or teeth followed by irregular wear.  Another common cause is the retention of one or more caps.  If a cap stays on top of a permanent tooth for much longer than it should, the opposing tooth will be worn more than it would if the cap was shed nomally.  Sadly, fracture of teeth is often caused by people attempting to examine the mouth.  In order to keep the mouth open some individuals use a rod with a steel 'prop' which is wedged between the molars; the horse risks fracturing one or more teeth when it bites on such a device.  Those attempting to use the device should be prevented from doing so.
Prognosis for corrrection with a limited number of filing treatments is very good.  However, this condition is often accompanied by feed impaction and gum disease and this may require follow up treatments to remove impacted feed to restore the gingiva.