f he cant be trusted not to run off and pester other dogs when he's off his lead then I wouldn't let him off it around other dogs until he can. I have to do this with one of mine (not just other dogs either, he's mad on scents as well), like you say anything could happen really, the other dog might be aggressive or fearful of other dogs and I know how irritating it is for me to have another dog come bounding over to mine, especially when he's on his lead. I tried all sorts of training with him regarding recall. He knows exactly what I want him to do in regards to recall but he's a stubborn little bugger. If I judge that the distance between him and another dog is enough that he isn't likely to run off then he can be let off.
My other dog on the other hand is brilliant, in fact she rarely leaves my side when were out, if out in a wide open space she'll do little circuits of me or walk directly behind my legs.
Not helpful I know!