Honestly this person just sounds scared of everything and kind of incompetent as a dog owner. I mean, you can't warn off one loose dog? Or keep yours under control, if that's the issue? And the friend hasn't walked her dog since? That's not an acceptable reaction – it's a horrible way to treat your dog!
Really bad advice overall. I find best to stop, make your dog stay right beside you, don't allow your dog to be tense on the leash, and let the other dog come have a smell, just enough time to acknowledge each other and then go on with your business. Longer time can let to aggression.
That being said, my dog was attacked 3 weeks ago by an off the leash dog, a boxer. I knew that dog was aggressive beforehand from another encounter months ago. We were on a path not far from our house, and I saw the boxer off the leash, I had enough time to tell my wife to hold our smallest dog (a 4 pound poodle) and "prepare" myself and my wheaten, setting ourselves sideways and in a non-threatening way, but the boxer just came running and very viciously started biting my dog on the leg. She just wanted to kill my dog. No matter how many times I hit and kicked that bloody dog, she wasn't letting off, one time I grabbed her from the back of the neck and she left off, but I was scared at that moment she would bite me and didn't hold strongly enough, and she went back to biting my dog on the other leg. Finally, the stupid of the owner came and separated his dog from my dog. My dog needed 16 stitches on the leg. Luckily it was nothing life threatening, and he has almost fully recovered.
So the thing I learned from that encounter is: if a dog is attacking your dog, calm down, if you are panicking it's going to be even worse, specially don't try to pull your dog or a person away from the attacking dog as you can cause really bad damage (tearing of tissue) instead of just puncture of tissue, and doesn't matter how angry you are and how hard you kick, the attacker is most probably not going to let off. Go behind the attacking dog, get it between your legs, then grab the attacker by the collar with both hands. If the dog doesn't stop the attack right then, with your thumb push hard into the dogs throat in order to provoke a gag reflex so the attacking dog stops biting. Video: https://www.youtube.com/watch?v=1ebR37K8hDg If you have a dog and you don't know this, you should watch it.