The pink stuff is the coronary corium and lamellar corium. The coronary corium is made of tissue that produces the cells that become the horn of the hoof wall. Injuries to the coronary band deep enough to involve the coronary corium can scar the corium causing it to produce low quality horn from the area of the scar.
The correct position of P3 is vital to the coronary corium's ability to properly produce horn.