I have a spaniel. He 'has' to go and get something to offer anyone who comes to our house (even the heating oil man who didn't even come into the garden!) I can imagine if he ever realised he could hold his tail in his mouth he would do this!
Some friendly dogs (usually gundog-types) like to have something in their mouth when they approach you with a greeting -- perhaps "offering" you the lovely thing (even if they can't actually bring themselves to let go of it!). If there is no lovely toy around, the dog is perhaps seizing its tail as the only possible offering to express his spirit of generous joy upon seeing you?
Or he might just be feeling excited and playful, seizing the tail as an object that might be the source of some game between you, in the absence of a toy?
not a problem, just curious! Bought a house and next door have a medium sized dog. First time I went outside at the back the dog went bananas with barking, but happily once it had seen me more than twice this stopped. It now looks hopefully at me, rushes up to the fence and whimpers, grovels, tail wags etc. (Phew). I found out its name and greet it, and it will now press against the fence to be patted. Or sometimes it won't even bother to get up from its place by the door.
but sometimes it takes its tail in its mouth and spins in circles!! What is this about? It is quite old, is it just demented or is there a reason for this?
BTW it is clearly well fed and is often inside the house so no concern for its welfare. And it is too fat to get through the fence. :-)