Saying get rid of your other pet because on dog went off on a human because of it, redirecting I guess, is ridiculous. YOU are in charge, that is your home. Your dog does not get to choose who or what lives there and that is no excuse to redirect his aggression or frustration on an innocent human.
IS it ridiculous? Why do we bother socializing our puppies and older dogs then? Why not just drop them into whatever situations we think are ok and expect them to behave appropriately? Our dogs don't make the rules. They live by the rules we give them. But if we change the rules after SIX years, how fair is that?
I havne't seen anyone say that Neiko has done anything but follow the rules that his owner set for his whole life, up until this incident. Yes, he was too dominant with the younger daughter, but the OP admits she (and the daughter) did not address that well enough. So, in effect, it was allowed. Allowing something means it's ok. That's one of the rules.
Let's break down what happened, because clarity is often in the details:
1. Suddenly, a creature -- that Neiko has NEVER encountered before -- comes into the house. He's curious. Likely stressed.
2. Then they yell at him, making him MORE stressed.
3. He showed good bite inhibition up front.
4. Then the daughter ran, which triggered things in his brain we can't begin to undertand (was it prey drive? a need to control her in the presence of this unknown creature? who knows?) and the second bite wasn't nearly as controlled.
5. The growl and movement toward Rosey is almost certainly redirected aggression (in that state of mind, he wasn't aware who it was).
6. Even despite the fact that he has pain issues, when Rosey puts him on the ground, he calms down.
Let's also look at what Rosey has said. Since her mom had cancer, Neiko was by her side during those two years. His life changed dramatically, but he coped with that. The children grew up and moved on. But he stayed by, as most likely, Rosey leaned on him more than she had when he was younger. Is is likely that he grew more protective of her during this years? I think so. Is it completely normal that this would happen? Yes. But we need to recognize that this may be the case.
So... things change over time, and we ask more of our dogs, without our realizing it. We add more to their duties, which may be stressful for them Then BAM! we toss something into Neiko's world that he has NEVER been socialized to. He's perhaps edgier than he used to be. We KNOW he has epilepsy and pain issues. Despite all of that, he exercises restraint at first.
But he's not perfect. But none of us are.
Would I trust this dog? I would. I would definitely get him evaluated, work with a private trainer, and keep working with him.
But this black and white idea of "my house, my rules" is crazy. You can't simply change the rules of the game in the 4th quarter and expect someone who has been a good team player all these years to adjust automatically. I would be very concerned if someone brought a creature that I've never seen before into MY living room too. Under stress, we tend to revert, especially if our training isn't current. Whose fault is it that Neikos' training isn't current? I'm not saying it's Rosey's, exactly. I understand that she had other family obligations. But it's certainly not Neiko's. He doesn't deserve to be rehomed.
He deserves to be conditioned, trained, and worked with. He deserves to be treated with all of the love and respect that he has given this family all of these past 6 years.
Follow MRL's wise (highlighted bolded) advise. Have him evaluated by a vet and a behaviorist. Then get busy. :hug: