Heh, this story reminded me of the construction site (building now completed) across the street from my office. They always had a dog with them, a lazy looking retriever. One day I was driving to work after lunch and I saw white stuff floating through the air; there were no nearby cottonwood trees and I slowed down to see if I could find the culprit.
One of the guys had the dog laying on the side of the road and was actually shaving it! No bagging (I bag my dogs' hair, whether brushing or shaving) and the hair floated away in the breeze in great white-golden clumps. After I parked and looked back I saw the guy telling the dog to roll over and it happily did as he shaved the other side. This shaving-and-releasing seemed quite over the top, to me!
So, in my perspective, the guy in the OP was absolutely fine. With a well groomed dog there were likely no bunches of hair floating away, it's entirely possible he was bagging up the leavings anyhow. There is no reason for someone to come up the sidewalk to yell at him for taking care of his dog, that I can see.