poor you. horrible when we get a fright....

shakes you up..
dogs can pick up if we are feeling stressed or down or ill. dennis always slept on mollys (daughters) bed from a pup. never went in paddys room but on the occasions when paddy was ill, even before i realised it, he would be with him on his bed or near him wherever he went.. there senses are amazing..
im no expert but my view is this....
if you stressed or anxious she will pick up on it and as you said being protective of your sensitive mind.. mayby shes taking charge of your job deciding who interacts with you and who doesnt. shes saying im out with MY human and im the boss..shes forgeting her maners and that your the one who calls the shots.. try initiating contact with the person before she does.. even a stranger in a garden, relax lead so she doesnt think you anxious,(good girl,treat) speak to them say hi,lovely day, bla bla bla BEFORE you get to them or as soon as you can and as you do if she quiet treat her..as you chat treat... soon shell think people and good behaviour mean yummy things..
you said that WHEN she walks past another dog quietly you praise her.. is that BEFORE, AS or AFTER.. i do all 3,with treats. Preparation,Motivation and Congrats..
with mine (olive especially as she can be a gobby cow and joe tends to sometimes lunge and make pathetic noises) as soon they become aware of another dog or person even far away and are still quiet , i start the above. every time they prick ears as dog comes closer i do it again till dog been and passed.