However, knowing your dog is a bit grumpy, would you then let it go up to a puppy, off-lead, in a pub?
As others have said, if you have a dog who doesn't like such situations, you don't put them in them if you can help it. It is this seeming lack of empathy to his dog that would concern me, rather than the fact that the dog was grumpy.
Out of interest, did the man explain his dog's behaviour, or just expect Sweep to take it?