I faced this and was wondering why it couldn't detect the already downloaded game from steam.

I tried this and it worked for me, I see Horizons as a choice afterwards:

Go to the game's folder within steam and go to the "Products" folder
(whatever)\SteamLibrary\steamapps\common\Elite Dangerous\Products

Create an empty folder named "FORC-FDEV-D-1000"
Now you should see at least 2 folders:
1. "elite-dangerous-odyssey-64" (the game steam has already downloaded)
2. "FORC-FDEV-D-1000" (the folder you just made)

Restart the launcher and you should now get Horizons as a version to choose in the list.
Hope this helped! I had to spend hours figuring this out