Help- my dog has strange social habits.

I got my dog when he was only a few weeks old, he’s a Bichon-Shih Tzu mix and is now 2 years old. He’s so weird with people and other dogs I don’t understand it! First weird thing is that he loves going up to any and all people we see on walks but he doesn’t let them pet him. He goes over like most dogs when they want to be petted or get attention but if people try to pet him he jumps back. People ask me if he’s skittish because he’s a rescue but he’s not and he’s SUPER loving with me and my SO. Like he always lets us pet him and he’s always on top of one of us snuggling all day. So I’m not sure why other people are a no go for him. We have friends over pretty frequently and they all treat him well and he’s okay with them.. I feel like my neighbors think I hurt him or something. The second weird thing is he’s kind of like that with other dogs too. He likes to go up to them and sniff them, he will let them sniff him too but if they try to play he just sits on my foot and stares at them. He likes being around other dogs and doesn’t seem to want to leave the area when they’re around but he won’t play with them either... I honestly can’t tell if he’s possibly socially anxious or just likes to be in control of his interactions. He’s my first pup so any insight at all is welcome!