Scary! Labs are usually not an issue, friendly to a fault, but the big doofus could still end up being too rough and not realizing it. If the same situation happened with a German Sheppard or worse a pit bull, then you REALLY would have reason to be afraid, even if you picked up your little one.
When we walk by fenced big aggressive dogs, I always pick my guys up and yell, NO to the big dogs, thinking they might listen. Don't know if they would listen, but picking up your Yorkies is a great idea IMO. My little male is way too aggressive with big dogs, like you said, trying to protect us I guess.
