If you've tried distracting your dog with treats when he sees another dog (or bike, car, jogger, etc.), and he completely ignores the treat and you, here's why.
When an animal (including humans) reaches a certain level of stress, an important change takes place in the brain, which starts the processes necessary for fight (aggression) or flight (avoidance), including the activation of the sympathetic nervous system. When that happens, pupils dilate, respiration increases, heart rate increases, and digestion shuts down.
Why? Because if you're being chased by a bear, your body doesn't need food in that moment, it needs to be fast and agile. Food can come later, but if you don't survive, the nutrients you get from food won't help you.
When a threat passes, the sympathetic nervous system is disengaged, and we return to a normal state of "rest and digest." Hopefully, where you are right now.
What does this have to do with your dog passing your neighbor and her Corgi?
Because whether or not your dog's reactivity is rooted in anxiety, fear, frustration, or excitement, the same process is taking place. It doesn't matter that her dog poses no real threat to your dog. What matters is that your dog's stress level has reached the point that digestion has shut down.
One other important thing happens at this point. Your dog is now focused on only the things necessary for survival (remember, this is about the dog's perception, not ours). Sort of like trying to focus on a crossword puzzle while a bee is buzzing around your face. So, trying to do any training at this moment is pointless.
Unfortunately, this is the point that most people attempt to "distract the dog" with food. But, as you now understand, it's too late.
This is why trainers talk so much about staying "under threshold." The threshold is the point at which the dog tips over into that fight or flight mode.
Where that threshold is depends on your dog, but changes depending on the proximity and intensity of the trigger, as well as duration of exposure.
For example, let's go back to the bee. If the bee is busy on a nearby dandelion, it might not bother you while you're gardening, but a bee buzzing around your face might be more concerning. If that bee is only there for a second before flying off, you might not move, but if the bee persists for 30 seconds or more, you might get up to avoid it. Multiply that to 100 bees buzzing around your face, and you're probably switching into serious fight/flight mode. See how slight changes can make a big difference in your stress levels?
While every dog is different, they all have a point where they can focus and learn and take treats, and a point they can't. If we want to maximize learning and behavior change, we keep them under threshold, gradually increasing the proximity, intensity, and duration they can tolerate.
Behavior modification for reactivity using positive reinforcement is not about distracting a dog with food. It is about using food to change associations to the things that trigger reactivity and to reinforce previously taught behaviors. To do this, we need to work at a distance, level of intensity, and duration that keeps the dog below threshold.
It's not that positive training doesn't work. Your dog just needs you to make a few changes so that it can work for them.