In England, there is a legal right to cycle on a bridleway [1] but as I understand it no legal obligation on the landowner to maintain the route in a "cycle friendly" condition.
In England, posting misleading signs on a PROW is an offence that the local council can take enforcement action against [2].
That sign as described sounds outright misleading and therefore an offence. Beware however that PROWs shown on OS maps can sometimes be shown as the wrong classification or even shown one where there is no PROW. I would recommend checking your local authority's "definitive public rights of way map" before contacting the landowner; if you contact the council directly they will of course check this as part of their process.
A landowner with a inconvenient historic bridleway on their land, changing or removing signage in the hopes of discouraging and potentially stopping traffic.... unheard of!
If it's definitely a bridleway then you should be allowed to cycle on it.
I used to live on a small holding just off the Coast to Coast path that had a foot path down to it, which was maintained as a tarmacced road by us/the neighbouring farmer for our own access.. used to take much delight in sending 'lost' mountain bikers back up the hill! There were multiple footpaths leaving in all directions but none of them rideable, doing so would have churned them up so permissive access was very much denied.
This reminds me of an occasion when I was out with my local mountain biking club. Our route took in a bridleway clearly marked on an OS map which crossed a golf course. When we reached it, we were challenged by a golfer who told us we had no right of way. He was seriously outnumbered, but had to back down when one of the cyclists found a bridleway sign thrown into the local shrubbery.
Tale of woe - basically dithered long enough for everything to sell out. Have a bog standard Trek on order (literally the only sub-3k bike there was left); think I'm going to use that to calibrate what I really want.
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