Perfectly normal. Your adult Shepherd has her mouth all the way open, has not closed it on the smaller pup, and is not being aggressive.
And yes, the 'puppy pass' will expire. That's when your dog better have a clue by then or she will be taught the hard way. That's nature.
Bear, Anna, Molly, Ossie, and The Countess Lisl von Schlaf
An Unhappy German is a Sour Kraut!