Saying that an animal's behavior is instinctive is deeply ambiguous. It incorrectly suggests that the instinct is in control, but while knowledge often guides or assists behavior it does not control it.
Instinct is a form of knowledge (or belief) and of course what we know or believe has a lot to do with what we do in a given situation. But this does not mean that we do not think or make decisions. Yet the concept of instinct is often used to imply that the critter does not think. This is a deep conceptual confusion.
In fact instinct allows the animal to think more deeply that it otherwise could, because that is how knowledge helps us. Here is a simple example. I have been treating a horse for a nasty wound, following the vet's instructions and working on the wound twice a day. Recently there was a new swelling, which concerned me, so I called the vet to come take a look. He looked at the wound and quickly saw what I could not see, which is that it was healing nicely. The swelling was good, not bad, a normal part of the progression.
Because of his knowledge the vet literally saw what I could not see. This is how knowledge works, and how instinct works as well. Knowledge lets us see (or smell, feel, etc.) the world in ways that those who lack the knowledge cannot.
So, for example, a bird can see a good nesting site, or some good nest building material. A horse can see a good thing to eat or a good place to scratch its back. A beaver can see that it now needs some mud. In no case does this mean that the animal is not thinking, quite the contrary. It is actually able to think in ways that we cannot, because it has knowledge that we lack.
Of course the animal can also be wrong, just as humans often are. This is why I sometimes mention belief along with knowledge, because the animal may be working on a false belief. For example, horses are wary animals by instinct and they may shy because they see what they mistakenly think is a threat, such as a stump. Even experts make mistakes.
In horses the idea of misunderstanding or false beliefs on the horse's part may be important when it comes to training and managements problems. But first we have to understand the underlying instinct.