Lots of breeds will struggle to recognise certain shaped dogs as a dog initially - I find sighthounds are baffled if its not a similar shape to them, and the further away from sighthound shaped a dog is, the less likely they are to quickly realise it is a dog.
Lots of dogs are also very put off by dogs with large, prominent, bulgy eyes that appear much more 'starey', which the flat face tends to produce.
Couple that with the nose rope, short muzzle, wrinkled muzzle/lips and sometimes protruding teeth of such breeds, and you can have some serious issues with dogs reading this as 'Go away or I'll fight you'.
I think a lot of the 'my dog doesn't think yours is a dog' is actually 'my dog is worried yours wants to kill him' as they can be similar reactions.
Most dogs will get over it quickly once they pick up scent and work it out, but not all (you can also confuse your dog about your own appearance easily enough, even with them close enough to smell you, simply by putting on a disguise or something that dramatically changes your outline, especially if you then stand still. Dogs need to match up familiar shapes and movements with scent when it comes to recognising people/other animals).