I agree with getting tense. Pups, generally, sense every emotion you feel and feed off of them. To me though, it sounds as though he is aware of the “threat” the other dog may cause but also there lack there of when on leash. Have you ever tried using a chest harness? The cushy padding is kind of like a sweater or a “hug”. It can give pups who are feeling a little agitated or stressed around other dogs a sense of security. Just like the snuggy blankets or thunder shirt (same type of idea) If he remains calmer and you remain calmer then he will learn that other dogs are not always going to be a threat.