If confronted with a seriously DA looking dog and I think Eve might feel the urge to leave me to get into an argument with that dog, I clip on a leash if we can't leave the area where that dog is present. It's not that I don't trust Eve to leave the DA dog alone, it's that I don't trust the DA dog to leave
her alone. If that dog starts coming towards us, previously I would've dropped her leash and let her escape, but lately I'd just use pepper spray on the dog if it was out of the control of its owner. I don't want her to feel that she needs to fight OR flee in a situation like that, I just want her to be calm and confident that I'll take care of the situation.
I've witnessed a smallish APBT pull its good-sized owner clear over to where I was walking my dog and try to go after her. She was in a park offleash, but I instructed her to go behind me and wait. The dog got past me and began going after her, still pulling its owner. Eve got up and ran a few feet away, changed direction and kept evading the dog while I helped the guy get his dog under control. Had Eve been on a leash, she wouldn't have been able to get away from that dog and would've fought back - and a 25lb Border Collie vs a 50lb APBT just isn't going to bode well for my little dog... Had I given her a "stay no matter what" command, she would've trusted me, stayed and been attacked. Then what would that have done, but cause her serious injury and prevent her from trusting me again.
Seriously, she's leashed quite a bit when I can't give her my 100% undivided attention. She's only a year old and while she's extremely reliable when I'm watching her closely, she is a puppy and can make mistakes if I take my mind off of her or use sloppy handling with her. So when I can't be *training* her, she's leashed.
And as far as dogs breaking their heel position goes, what the hell do people do when their dog does that? Just gasp in horror and let them get away? CALL THEM BACK! If you don't feel you can call them back under distraction then your dog has no business being offlead without further training. The recall is more important than ANY other command if your dog is off leash. I don't really have a good example of Eve's offlead recall but I posted a video thread with her doing some behaviors under very intense distraction (for the longest time, the one thing that caused her to lose all self control was a tennis ball) - a "leave it" and call-off mid chase like this in the video is the very minimum that I expect before I'll let my dog off the leash.
http://youtube.com/watch?v=6MQxRcks9-g As you can plainly see, my dog isn't perfect but she is under control and I can keep her from getting the ball if I want to, without a leash, without harsh verbal corrections and without excessively repeating commands.
If Eve goes to break her heel position or wants to investigate something, I verbally correct her or tell her to leave it alone. If she were to break her heel and wander off, I'd snap her out of her distraction and call her back. That's what control is. It isn't
all about following commands perfectly, it's about having a dog that will respond to your voice and not ignore you. I put just as much value on Eve's response to a low growl or a smooch noise from me as I do on her ability to heel by my side or come when she's called.
Be pro-active. If you see something about to happen, step in and prevent it. If I'm walking her past a really high-intensity distraction (whether she's on or off leash) I do all I can to get her attention and then I do something to take most of her mind OFF that distraction. Don't just let the distraction consume them so that if they get the chance, they'll run straight for it.