Oh my goodness, I am so glad everything came out alright because you are right- it could have been tragic. I am so leary walking Roxie even on her leash. I look around constantly to make sure there are no loose dogs running around in the neighbor. I had to carry her home one day-holding her up on my shoulder, with a big dog follwing me and looking at her like she was a tasty snack. No matter how much I yelled

for him to go away- he just kept focused on her. I so glad the other dog panic in your situation. I think he knew he would had been a goner if he touched her. I know I would have just jumped in the middle without even thinking about it.
I am happy for you both!