Rehome the dog. It sounds adorable, and it was clearly not being aggressive. A "bite" to the face which doesn't break the skin is nothing - and not aggressive. It was probably a lick which scared your child so he cried. If there was anything other than friendliness from the dog, this was a VERY minor warning shot. Good dog, I say, for holding back and being so "polite", from a dog's perspective.
However, if you are a) so paranoid that you can't see this, b) don't understand dogs enough to understand this and c) can't teach your child at nearly 2 not to touch the dog's head you are not a suitable owner for this dog and it's all going to go pear shaped.
Try the Dogs Trust. They understand dogs well and will rehome him somewhere more suitable.
My son has grown up with a dog who is certainly not young child-friendly, and understands entirely how to interact with him. Never had a problem, never concerned about it - but I hardly allow them to play together nor did they stay in the same room together until he was over 5 - it's a managed relationship, by me, the adult. I'm comfortable with that. You're clearly not.
Dogs aren't playthings or creatures that you can "always trust". No dog, no matter how soft, is never going to defend itself. For a dog to be so careful as to say "oi", yet not leave any mark, that's a good, solid, safe dog to have round a child, I say. It's the adults I'm more concerned about