If we focus on SOLELY the dog aspects of this, we have a dog who bites strangers, that the owners do not have adequate control systems in place to handle, and where the owners are blaming bite victims for having reported a bite (which might not have been in the bite victim's control, due to reporting systems). This is a recipe for someone else being bitten, and badly.

I'm coming down on "this dog should not be alive" and "these people should not own dogs" pretty heavily, I have to say.