Yes, your dog will most likely become highly aggressive towards this person. I have that same situation -- a neighbor used to call our house from his cell in our front yard, while snarling, barking and harrassing our dog. When I became aware of it, and flew out the front door after him, he no longer does this. He's a complete idiot.
BUT -- she knows. And she knows when he steps out of his front door, she absolutely hates this man -- and I don't blame her. She will never get over that, ever. He knows it too.
I agree to video tape it -- and take a copy to the police department and file charges for harrassement. I'm not sure what the laws allow for, but the police can at least talk to him. If they will allow a restraining order to keep him xxx feet from your property, do that too.
It very well may get worse as your dog ages, if he is allowed to keep doing this to her. And you don't know how far he will go with his treatment of her. If you can stop it with police report, I would.