Final answer:
The Houyhnhnm reject releasing Gulliver among the Yahoos because they view Yahoos as irrational and corrupt, and worry that Gulliver might negatively influence their rational and virtuous society.
Step-by-step explanation:
The Houyhnhnm reject releasing Gulliver to live among the Yahoos because they see Yahoos as depraved and savage, and they do not see Gulliver as being wholly different despite his claims of superiority. The Houyhnhnm's society is based on reason and virtue, and Gulliver's association with the Yahoos - an irrational and morally corrupt species, in their view - prevents them from accepting him. They are concerned that he could corrupt their society, as the Yahoos have done to their own. Additionally, they consider the Yahoos incapable of anything beyond basic survival, thus any higher level interaction or integration between Gulliver and the Yahoos is seen as unfruitful and potentially dangerous.