If your horse is only 3 and the tooth was extracted at 1 year of age (2 years ago), the tooth would have been a deciduous premolar as molars are not present at that age and all cheek teeth would be deciduous teeth (primary or baby teeth). My concern would be some type of osteitis of the facial bone that can occur in young horses that is a normal situation.
As far as extractions on older horses, it is not abnormal for there to be an enlarged area above the tooth IF the tooth was repelled by opening the sinus cavity from the outside as some boney enlargement from the flap of bone made into the sinus would be expected. However, the swelling should not increase and decrease so my concern is that there could be a sinus infection present or problems with an adjacent tooth. I would rec. have your vet x-ray the area to check other teeth and the sinus cavity. Also, a thorough dental exam with a speculum under sedation is required.