Earlier quoted context omitted.
This puzzle seems rather hand-wavy to me. If we actually define a specific finite number N in the equivalence relation "two such sequences [are] ‘equivalent’ if they are equal after [N] entries", no one is in a position to take advantage of the equivalence classes. Either their position Or their position > N, in which case they cannot see the entire sequence after N entries and thus cannot determine which equivalence…
N is not fixed, so we're always in case (i), position ≤ N. The equivalence class does indeed not specify the colour of the hat. The invocation of the Axiom of Choice was used to tell the prisoner what to guess in that equivalence class, although there is no guarantee that it is correct in their specific case.
Seeing only an infinite number of hats ahead, which match some pre-chosen sequence after an unspecified finite number of hats, how do they know if they are in position, 1, .... i-1, i, i+1, etc?
I mean, even if you know which equivalence class the sequence belongs to, you won't be able to guess at the color of your own hat without knowing your position.