Question: Why does the Colonel let Spirit escape at the end of the movie? I know it's meant to be a sign of respect. But why would they respect each other? In my opinion they have no reasons to have mutual respect.
Answer: Because the colonel saw that Spirit and Little Creek had a strong bond, and how hard Spirit had worked for his freedom.
Logically, it never should've started. All of this trouble for a single horse while there's important military duties and concerns should've never really happened. You could argue that it was to chase Little Creek, but the Colonel never regards him. It was all for Spirit.
Answer: Because he probably gave up.
Answer: You don't have to have mutual respect to do what is right or just. Letting Spirit escape was the morally right thing for the Colonel to do.
raywest ★