I have no advice, just moral support. I watched Sabi teach dozens of pups and young dogs, I trusted her judgement, but I can see it freaking people out.
I can tell you that several of my more experienced friends had commented that specific to GSD's the females show a notably higher tendency to dog aggression then other breeds. In most breeds the males seem more prone. I have to say that my experience lends support to this, but since I am not that smart take it for what it's worth.
Funny you mention the training older dogs do with puppies. Right after this happened, one friend walked up and offered to "beat the guy up for me", and another couple of people commented on how much they appreciated my dog putting some schooling on their puppies.
It's a mad mad world folks, everyone has a different level of experience...it's all good. I also trust my dog's judgement...to a point. And I'm also sensitive to the feelings of others. It's all good. I'll watch my dog more closely for now, but I am confident she won't ever hurt a puppy...it's just not in her temperment. An adult dog....not so much...given the "right" provocation in her mind...bad things could happen. But not with a puppy...
It's not the size of the dog in the fight, it's the size of the fight in the dog. Mark Twain