What I gauge from this clip using my understanding of Dog psychology, especially having Labradors and Retrievers all my life.

The Dog (Probably a bitch) is most definitely not happy that the guy is touching her pup. Yes, she's wagging her tail but this is also a sign of nervousness and not just happiness. You'll notice she looks around a fair bit. This is to try and find help from others. You'll also note that she opens her mouth slightly a few times. This is a massive sign of unease, like she wants to bark but stops herself. The paw also. It's deflecting the guy's hand away and trying to shield her pup from him.

All in all, she is not at all impressed by him and is obviously feeling threatened. She is so well behaved though that she uses subtle signals to him to go away rather than using aggression. Makes me sad to watch this in some ways.