To be honest with you if I was out walking, alone or with my dogs, and I came across someone walking their dog with a muzzle on I would give them a wide berth. Not because I would automatically assume the dog was vicious or anything, but it obviously has a muzzle on for a reason and my dogs or myself getting into it's space is not likely to help matters. If the owner of the dog told me it was okay to let the dogs meet or something like that then I would probably do so.
Unfortunately until the owner said something I would have no idea wether the muzzle was being used as a training aid (as in your case) or just as a management tool, so I would proceed with caution.