That's not always the case. My grey Sailor greets all other dogs, including greys with ears full up and that's about the only time his ears are up. I have cats and as long as the dog doesn't act like prey, he sniffs then ignores it. He doesn't care if it's playing, running or jumping just if it acts like prey.
As far as Gable, what kind of dog did he meet with your brother? A bichon and say a lab will get very different reactions. It does sound like prey drive, but it could be he's still trying to figure things out. It's hard for me to say because it sounds borderline. You will have to be very careful especially with little dogs. Something you can do is go outside and when you see small dogs off in the distance, if he starts to show interest, call him. When he focuses on you, give him a treat. He'll start to learn that when there's little dogs around to focus on you for good things. Make sure to do this from a distance and not near the little dogs.