I've encountered rather interesting behaviour. My rainbow pretender was quietly doing his things (meaning searching for magic sites) when he was attacked by Hunter of Heroes. He didn't have any horror marks (or anything remarkable at all). After he has defeated the horror he got morphed into "Old Standard" (what is "Old Standard"?). He has retained all his magic levels, but not physical characteristics. As it happened on that turn he was moving to another province to search that was [as it came out unfortunately] populated by barbarians. Needless to say that in the new morphed form my rainbow pretender has promptly got slaughtered
I haven't seen (or read) anything indicating the possibility of morphing due to horror attack. I wonder if it's a bug.
Btw, why he has even got attacked by a horror?
I kept saved game in case it's a bug and IW would want to investigate.