Why does a horse hold its tail up while a rider is mounted?

Arabian horses are bred to hold their tails up, especially at a canter. (see: Arabian horses)

But if you are just sitting on a horse and it raises it's tail, it probably needs to poo, or fart at least!

Many horses wait till after being saddled and mounted to do this, especially in the morning. It is probably all part of the trick of 'puffing-up' to stop the girth being tightened to it's full extent! Or perhaps once mounted, they realize it is time for work and get their bodily functions over with for their own comfort, or, depending on individual personality, to let you know what they think of it all!?