I looked it up in case anyone else was curious, and the law was supposedly related to people doing this to lure horses away.
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Kentucky should also be red. The law was to prevent horse theivery. When you hitch a horse to a hitching post the knot is just a reminder to the horse to stay where it is, it won't stop it from walking away. I don't know if it was ever successful, but given that at least two of the commonwealth states had the law, I assume it had some success as a method of stealing horses.