A properly trained dog will NOT lose it's ability to determine what is and is not a threat under SchH training.
This was originally devised as a TEMPERAMENT TEST for the German Shepherd dog.
SchH is not just about bite work. It's about correct strong temperament, and the total dog.
The SchH bitework is very regimented. The dog must learn not to touch the agitator unless there is a threat. They are not to bite a person standing still. They are to release on command.
Dogs must also track and do obedience to earn a SchH title, and all 3 tests, tracking, obedience, and manwork, must be done and passed on the same day.
SchH training is a very good way to learn about dogs and dog training in general.
JENN, I would urge you to do a lot of research on this subject before you decide yes or no on doing this sort of training with your future dog.
I have had many dogs who were PP trained, and I own one bitch now who has her IPO1 title. They have certainly not been any more dangerous or more likely to respond in an inappropriate way to a non threatening stranger.
In fact I found exactly the opposite. A dog who clearly understood what constituted a threat and what did not.
Any dog who would feel a need to overtly threaten a judge in the show ring IMO does not have a correct temperament, barring certain breeds bred to be indiscriminately aggressive towards strangers such as the Fila Brasileiro.