Yes. They absolutely do...even if I KNOW they wouldn't do anything.
Case in point: One evening (during my college days) there was a random knock at the door and my shepherd started going off as per usual. I couldn't tell you why I did it, it was really stupid, but I just opened the door. There on the other side of my glass door was a very large man. A complete stranger.
He made eye contact with me then proceeded to look down, made eye contact with both of the dogs. A glance to my left. A glance to my right. Made eye contact with me again, and promptly said, "Uh, sorry. Wrong house." He then quickly turned and walked away. I was left standing in my doorway thinking, "Oh, ok. Sure."
Later I realized how stupid a thing I had done. However, it goes to show that most people avoid you when you have large, intense dogs whether you're on the street or in your own home. My shepherd will stare down anyone she sees. I know she just wants attention and scratches, but no one else knows that. They just see a large, black german shepherd staring them down from across the street. I'm more than ok with that. In fact, I love it.