I never let dogs sniff under my dogs. I will move my dog away or ask the other owner to move their dog. There are just too many infections that can be passed, the worst being brucellosis. I try be nonchalant about moving my dog away, but if the other owner acts offended, I explain that I am just not comfortable with the sniffing of my bitches.
At dog shows, the etiquette is, keep your dog under control and never let it sniff another dog.
If the owner says "He is just saying hello", my answer is teach him to wave!