My dog was showing the same signs in a park we train at mostly licking lips (just not as much as this dog) with Kids running around playing etc behind him. He has been around children and does really well with them. Trainer said to pay more attention to his signs that hes nervous. I am researching signals of anxious dogs. yet when I came across this video the comments on you tube said they dont see any signs of nervousness. From what im learning it is, so Im asking if there are other signs that this dog is giving off that means the lip licking is not anxiety or I am seeing it right that it is.
Oh.... I am not a learned individual in that department....but trying to become more in tune with what you ask of, as well. I didn't even know licking lips was a sign of nervousness or anxiety of some sorts.....so thanks for mentioning it in your original post with video. Wish I could give you a better analysis....but I do see the dog's eye contact basically one of two directions....one looking at the running fun loving children ...and the dog's look to me says..."they do call me a Shepherd....but I will repress this innate attribute I am known for" equals struggle or "conflict"....and then the other direction the dog looks to many times and at these times the dog makes other body changes ( subtly )...the dog's eyes say to me...in this direction is the master/command giver/human...and dog knows he is to obey and perform as trained...and eventually she/he will release me...but I sure hate waiting.....equals struggle. So, I see "struggle" being the overriding theme.
I have no idea how they came to get the dog to behave as such....I would hope it was in method which works successfully and perhaps the dog is very new at this and this is one of his first proofing attempts.
This all in my own opinion ....which is rather limited....but always looking to learn.