"Is your dog friendly?" These are often the first words you hear right before someone's dog is nose-to-nose with your leashed dog. Sometimes it works out OK. Other times, it can escalate quickly into a more dramatic turn of events. You watch, hopeful, that your pup is going to hit it off with this newcomer. You have a friendly, loving dog, why wouldn't the greetings always go smoothly?
It starts with understanding that dogs greet each other in a specific way, and they must rely on body language and various other signals to communicate feelings and state of mind. While every dog is different and some may be fine with a face-to-face interaction with a unfamiliar dog, in general, greeting other dogs while leashed can be a negative experience for many dogs because of the following reasons:
1. It's unnatural. Humans may greet each other face to face, however this can appear very threatening to dogs and induce stress. Yet this is the way dogs are forced to greet each other while on a leash. A dog's natural way of saying hi is more fluid. They move around each other's space at a slow to moderate tempo while giving off signals and body language indicators to communicate their intentions. This helps them engage safely with other dogs. They continue sniffing until they decide the other is safe. This is not possible when a dog is leashed.

2. Dogs are very aware of the fact that they're on a leash and their movements are restricted. Being restrained can be very alarming to many dogs. Their ability to move around the other dog to "check them out" gives them a sense of security. Because they cannot escape a situation that potentially could be uncertain & threatening to them, they need to deal with the stress which could make dogs feel compelled to react and go into a defensive "fight" mode.

3. All dogs are different. Some are excited and energetic while others are shy and calm. Dogs have different play styles too, which means not all are compatible. An over-excited greeter that gets in another dog's personal space could cause problems. Socially anxious and nervous pups will want to interact with a dog differently than a confident, more dominant dog will.
At the end of the day, it's best to let dogs meet on their own terms, off leash (in the appropriate environment), and with properly matched playmates. So don't feel guilty about politely turning down invitations for your leashed dog to greet another...that doesn't make you or your dog unfriendly. It's actually the most considerate action to take.