The basic rule is, if a dog is on a lead, your dog should not approach it.
You have no idea why they are on a lead, and it may be because they will react and bite, or the poor thing is plain terrified.
So, when I see a OFF lead dog coming, I tend to call my dog back, just so he is closer to me and I am more in control of the situation. Then off lead dogs meet and sniff etc.
If I see an ON lead dog approaching, I either turn aside, or call mine back and put him on a lead, or call him to me and distract him while the other dog passes.
Sometimes, the owner with the ON lead dog will, say - Oh don't worry he is fine, and then I relax and let mine go and say hello.
But I find he is much more likely to bark, and be a bit too 'in your face' when the other dog is on a lead, so I prefer to avoid it.
Your dog should never approach an On lead dog without permission. There are loads and loads of comments on these boards from owners who get really upset with this, as they are minding their own business and your dog intrudes.
You should also only have yours off the lead if you are in control and can call him back,and if you are somewhere where there are other dogs and people, then when he is off the lead, you should keep him within sight and not too far ahead. I get mine to run back to me frequently, which he loves (treats may be involved) and allows him plenty of space to run, while not letting him get too far away.