That's all pretty normal behaviour for a 10 month old. I agree with the lady you saw - nothing you share in your post indicates shyness or nervousness. Probably just going through a typical teen phase where he feels he is too cool for acting 'puppy-ish'.
When Keeta was still a young dog and I had her less than a year, she was like Appollo, hyper-focused on EVERYTHING! It just took time and consistent handling to get her to learn to ignore other people and noises and to chill.
Wow. Just wow.
Yes, it is pretty normal for a 10 month old.
DOGS DO NOT FEEL THEY ARE TOO COOL TO ACT PUPPY-ISH! Dogs act puppy-ish when they feel puppy-ish.
Dogs are not people, and they do not think like people do. They may give a look that one may mistake for embarrassment. Usually it is anxiety because the dog is uncertain if the owner is irritated or if he did not do something correctly. It isn't embarrassment.
Dogs have a range of emotions. But they do not worry that they are looking puppy-ish. That is anthropomorphizing the dog. It can be dangerous to do, and really quite disrespectful. Dogs are wonderful critters on their own merits. They make awful humans. That isn't what they are intended/created to be. They are wonderful companions to humans, because they pick up on our moods and body language, and will repeat behaviors that make us laugh, and behaviors that make us happy, and will often be calm and quiet when we are sad or angry. They are good at comforting us.
It is really frustrating.
You have to study the dog in front of you. With a dog with solid nerves, you can just work right through this phase, yes obedience and tracking are good confidence builders -- anything where the dog uses his body and his brain to perform tasks and is praised for completing a series of tasks correctly builds confidence. Some would force the dog to accept the overtures of strangers and others feel the dog can be aloof. Depends on the dog and what you intend to do with him. A SAR or therapy dog, probably needs to accept overtures from friendly strangers. A family pet -- depends on what kind of family, if you have a wide range of family and friends over often, then it might make things easier to have a dog that will accept overtures, keep working. If you are less outgoing, you may choose either way.
If you think the dog is weaker in nerve, than you might consider taking a break. Take about a month off of taking the dog out and about, maybe two months. Continue to work on obedience, and when you resume, do your best not to over-do it. Go to home Depot, but skip the pet store. Some of the time, tell people, "No, he's had a busy day already." The trick with a less confident dog, is to avoid over-whelming the dog. Build the dog's confidence with agility, nosework, herding, obedience, sure, but also by being totally trustworthy.
Being totally trustworthy means, you control the environment. It isn't forever. It is over a sticky stretch, if you do it right. Meaning, no one comes out of no where and bops your dog on the head with a friendly or not so friendly pat. It also means knowing your dog's limits and staying well within them. Taking charge of situations and getting dogs out of them before he becomes noticeably uncomfortable.
Noticeably uncomfortable, is noticeable to others. A dog that is hiding behind you, crawling up your back, or barking and lunging are indicators that the owner failed to manage the environment. Be aware of your dog's body language. If he starts licking his lips, yawning, searching for your car -- get him out of there, you are on the edge of having done too much. In fact, better to go to one place, and after a few minutes to leave for the day. Leave when the dog is fine and happy, and the next time he is less uncomfortable because 1, nothing bad happened when he was last in this situation, and 2, because he is with you and you take care of everything.