
The normal way to use a stooge dog(I had a GSD who acted as stooge dog for a lot of dogs with dog to dog aggression as he was such a super dog)is to have the agressive dog wearing a muzzle on the first meaning & to have the dog on a lead. I certainly would not let them met without some restrait on the aggressive dog. My dog never reacted to any dog attacking him whether it was whilst he was being a stooge dog or for real(happened a few times in RL)
Most dogs have dogs have a comfort zone & I would go down the route of having a stooge dog & to approach it from a distance closely watching your dog & as soon as you see him start to show signs of aggression turn away & distract(this can be done on lead unmuzzled so he can be rewarded). just letting him loose with astooge dog will IMHO gain nothing
He has possibly been subjected to aggression & possible injury from another dog(s)before you got him & this is why it is so had to correct. He needs to learn that there is no threat to him from other dogs.We have a fair few such dogs come to our club(especially one that have been turned away from other clubs)& with a lot of imput from the owners & the trainers the behaviour can be modified. It might be worth you goind to a local club without him to discuss your problems & you might even find someone who has gone through the very problem you have now.
It is difficult of course difficult to give correct advice at a distance & without sight of the dog & his reaction, you may want to consider using a muzzle for walks just for your own piece of mind, not something I would normally advise as a stock answer as it does not cure the problem but prevents the dog harming others & might just might reduce the problem whilst he is wearing it