Have tried this a few times to make sure it's true.
When you choose "Light Chestnut" as an option for Quarter Horses (as one of the breed unlocked coat color options) at 100% - you get a chestnut colored horse (ie. a tannish color rather than an orange-ish one). So Light Chestnut is impossible to breed as it's mapping to Chestnut. The problem isn't just the look of the color as when you go to breed the horse its color is listed as "Chestnut".