This looks worse then it really is. This is an inflammation of the Bursa that’s in front of the carpus and not of one of the carpus joints. The horse is not very lame and can bend the knee all the way. This would not be the case if the inflammation was in one of the joints in the knee. X rays were with in normal limits.

Due to trauma, infection excess of serous fluid is secreted by the walls of the bursa.
Treatment with drainage and bandaging should bring the swelling down. Steroids should be used if infection is not the case.