That sucks. On the flip side it’s funny, sometimes I’ll be 50 feet away from someone and already I can see a sneer-faced readiness to launch into a tantrum if my dog so much as walks towards them. I find it amusing to watch different types of reactions to dogs. Most people are totally cool but some are just looking to argue. Dog behavior is extremely predictable, some people are just really bad at seeing this or perhaps just too plain scared. What’s really unpredictable is human behavior! Personally I like when dogs approach me, because I like dogs. When people hold their dogs back I feel sad. That’s my rant.
My advice is to always wear a smile, whether or not you have perceived some slight. Pointing out someone’s rudeness? What’s the point? That’s just going to make things too uncomfortable for long-term neighbors. You’ll come off as grouchy.