Yep, I think it means "Not all horses are virtuous, in just the same way as not all men are kind". "All X aren't Y" is a phrase I've always had problems with. To me, it logically means "No X is Y", but often it's understood to mean "Not all X are Y" (in other words, "Some X aren't Y"), which I think is what's intended here.
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AvangiBTW, I agree with your point about "all X aren't Y" technically meaning that NO X is Y, but I disagree with your statement about "often understood." I'd say, "always understood." (If you have a counter example, please share.)Well, it somewhat depends on context, but the following would (IMO) usually be understood to mean "No