True, but that's not something the AI can handle. I'd prefer it to be more automatic. One idea I've seen is allowing anyone with Open Borders with the Hippus and a certain tech to cast the "Hire Hippus Mercenaries" spell. This costs money and automatically gives the Hippus gold, and you get a Hippus Mercenary that's roughly as strong as the best mounted unit the Hippus could produce. Once the Hippus Mercenary either dies or has its contract expire, the Hippus get a War Veteran unit with a portion of its experience that can be upgraded to any mounted unit.
I'm not entirely sure how to balance that with the Guild of the Nine. Bear in mind that you are giving units to your opponent. Though, perhaps it would be best if hiring mercernaries were disallowed if the Hippus have been vassalized or if you're in a permanent alliance with them.