The Reds boss was "gutted" for Moussi but at the same time sympathised with the Durham official, who by the laws of the game had no choice but to show the French midfielder his second yellow card of the match.
It looked like the clash between the Championship's two in-form sides was destined to finish goalless, but Moussi reacted quickest to substitute Dele Adebola's flick to fire home in the third minute of added time and send the City Ground into raptures.
Moussi jumped into the bottom tier of the Trent End to celebrate, and when he emerged he was dismissed.
"I spoke to the referee at the end of the game and he apologised to me for sending him off," said Davies.
"He said he was really sorry and that he didn't agree with the rule but he had to send him off.
"I said he was right, so what do you do? It is the most pathetic rule ever.
"Your player is celebrating a goal and it comes from sheer emotion and he goes and forgets himself for two or three seconds and runs into the crowd.
"I'm gutted for the lad because he played very well against Newcastle on Saturday and he came in again tonight and did very well."
Moussi's goal saw Forest record five straight league wins for the first time in three-and-a-half years.
However, the victory was tainted by the news that striker Dexter Blackstock had suffered a worrying injury during the game.
Davies added: "Dexter Blackstock has medial knee ligament damage, but I don't think he will be out for too long as it's not a tear, it's just an over-stretch.
"Certainly I would think it will be a couple of weeks for him though."
Barnsley arrived in the East Midlands on a three-game winning run of their own.
Boss Mark Robins lamented the cruelty of his side's late defeat.
"It can certainly be a cruel game. I know how Ipswich felt a couple of weeks ago now when we did the same to them, but we have got to take it on the chin," said Robins.
"We've done everything right and defended really well for 93 of the 94 minutes. Then, we switch off to a long, hopeful ball which we have defended well all night.
"It is a sickener but we have got to get on with it and bounce back from it, and we will do that."
Robins added: "I expected us to have to defend for long periods because that's what happens when you come up against a side that is confident and throws bodies forward all the time.
"We nullified their threat until we could grow into the game and then in the second half we created a few chances and their 'keeper worked far harder to earn his corn."
Robins felt his side might even have been able to earn something from the game had referee Miller played a suitable amount of stoppage-time.
"In the four minutes he added on there's been a goal scored, a celebration, a sending-off and we made a substitution and he has played four minutes," said the Barnsley boss.
"Surely he has to add a little bit more time on for all that, but he didn't.
"We might have just sneaked one and equalised because panic set into them when the ball went in and about their penalty area at the death."