This dog wasn't tethered. He literally 'appeared' and was standing over my dog.
Then all bets are off! I don't do untethered dogs with my dog while he's leashed. Working or not working. Leashes make it really hard for dogs to communicate with each other properly - when one is on a leash, and the other isn't...?
Best case scenario, the dog off-leash is friendly, and will approach my dog slightly to the side, brief nose sniff, then start circling to sniff bums. But if my dog is leashed? His ability to do the same thing in a way that will communicate to the other dog, "I'm friendly too" is really hard to pull off (read: near impossible). When these exchanges happen to go well? I consider it really lucky.
Add to that my dog is trained as an assistance dog? One thing he's really not okay with is another dog getting between me and him. That ain't okay. He considers it his job to keep that from happening (which is an instinct that I encourage, and absolutely won't 'correct' him on). So when friendly-unleashed starts the friendly "let me at your bum" circling of my dog? At some point that inevitably puts him between me and my dog.
If my dog is also off leash, that scenario is okay. They'll do that circling away from me so that doggo doesn't need to be concerned. But when my dog is leashed, that circling happens right next too my legs, and the other dog ends up between me and my dog in a proximity that my dog isn't okay with.
Predictable problem. I can see it coming. And that's assuming untethered dog is friendly. Which isn't an assumption I leap to quickly, irrespective of the owner's (irrelevant) assurances - because I'm not concerned about their dog, that's
their job - I'm worried about my dog, and is this going to unnecessarily stress him out? Because if he's stressed about his safety? He isn't worrying about my safety, which is what I want him to be able to concentrate on. "It's not your dog I'm concerned about" is something I've learned to say clearly and assertively without sounding aggressive).
When it comes to untethered dogs while my dog is leashed? Nup. Ain't happening. I'm useless at advocating for myself, but I protect my dog like a tiger.
And if I had the benefit of being in a shop at the time? I ain't leaving till owner, or shop staff, resolve the situation at their exit for me. They're gonna hear about it. "Who's dog is that? Oh my god! Can someone help? I can't get out!..." The whole shop will hear about it if necessary.
I
personally wouldn't do anything to try and intimidate the other dog in the situation you described:
1) because the dog hasn't done anything wrong, the owner has
2) if the owner sees me scare their dog? I'm gonna cop an earful - and that's a confrontation I don't need; and
3) I can't do anything to intimidate that dog without my own dog registering "this is not an okay situation", which is the opposite of how I want my dog to interpret what's going on. If I throw a tanty inside the store? My dog is (appropriately) going to be concerned if I'm okay. If I direct aggression towards an unleashed dog, my dog registers "boss is scared of unleashed dogs", which is going to make my next encounter with an unleashed dog more stressful for me and my dog.
Add to that- if I interact with a dog, in a friendly or aggressive way? It's an invitation to that dog to interact with me. Friendly or not? I don't want that interaction.
That dog is not my concern.
I'm guessing where you are, dogs tend to be larger, rather than the micro-dogs you tend to get waiting outside shops here in the metro area. Which makes it even more risky. Not because small dogs are friendlier, but because a larger breed doesn't even need to mean it and they can do a lot of damage to my small pupper.
I'd definitely talk to your trainer about this. This sounds like an environmental situation that they can probably help you out with, with strategies that are going to work for you. This likely won't be the last untethered dog you come across while you have doggo with you working. You also need to factor in the average level of knowledge of people in your area about assistance dogs (probably that's lower than in metro areas - depends, because places like Toowoomba everyone knows about ADs and the respect for them is crazy high), and the attitude of people in your area to letting dogs do their thing, irrespective of size etc (which is potentially more cavalier than you'd get in a metro area).
Those are factors that your trainer can give you tips for that will work for you and your dog.
TLDR: Untethered dog while doggo is working? Not going near it - I'll go in almost any other direction than towards that dog. And the owner is gonna get the performance of a lifetime from me. Because they're the idiot that is being completely unreasonable in that situation. And fk that!