I used to sell Andalusian horses for a big breeder. One of the horses on the sales list was a mare w/ that hock rotation you are describing. One of the reasons they were selling her was beca of the hock rotation, afraid she would pass it on to her babies. there was nothing else "wrong" w/ her so she was a good "deal". the interested buyer was somewhat concerned but as I recall she "passed" the vet ck and they were happy. later did some research and I think it is sometimes just a way of moving and does not contribute to unsoundness. but as in this example, if someone can see it easily (like other conformation faults) it can lesson the percieved value of the horse.
another horse they had, also had huge hock movement sideways, and also had a huge overstride. powerful moving horse it seemed. but from the side I always thought his hocks were too far out behind in the trot, not coming up underneath him.
I think what's more important is the angle of the hock from the side, way the hind leg ties in, length of hip, connection over the back, and length of back. and overall how the horse moves.
If you google "hock rotation" you should find some articles on it.
