Wow, I also have a plotty who is afraid of people! Her name is Agnes. She's a very sweet, smart girl who is great with other dogs, and great around me and my boyfriend. We got her a few months ago when she was about 3 years old.
She was afraid of us too, at first. To me right away the first thing I wanted to fix was her leash walking. That first walk with her was a nightmare! I've never experienced a dog pulling on a leash that hard. I thought that she just had high energy needs and needed more walks and runs, but it was only after considering her fear issues (she was afraid of who was holding the leash!) that we really started to make any progress. We started off with a head collar and mapped out one small route (~0.5 miles) for our walks and did that 3 times a day every day. This gave her the opportunity to get used to the sights/sounds/smells of the neighborhood. Then we graduated to not using the head collar, and only her normal collar and whenever she pulled, I would do the "touch" command right next to me, then we would continue. Now we can make it just about all the way around the loop without her pulling at all! So we're working on expanding our radius and throwing in new challenges like walking past construction noise and the local Elementary school (ironically it seems like it's the smallest humans that she's most afraid of.)
She does the same fleeing behavior that you described when we pass another person on our walks, but it is definitely becoming less and less severe. Strangers in the house, though, she's still pretty bad at dealing with. For now, when a stranger comes in, she'll just retreat to her bed in the corner and hide. It's better than being aggressive, I suppose, but it's still really sad to see. I've been trying to get my friends to come over one-by-one to get Agnes used to meeting people, but it's hard to tell if much progress has been made. We aren't a particularly social bunch, so it hasn't made a huge impact on our day-to-day, but eventually we'll have to go out of town or something and leave her with my boyfriend's parents, who she particularly hates. Hopefully before then she'll be better with new people.
If anyone else has any thoughts or advice on dealing with people-phobia, I'm all ears!
