our Rainey did that after she began having seizures at age 10. She would act like she'd never seen the room she was in, the backyard, etc. Sniffing, moving her head rapidly, walking in circles. We suspected a brain tumor (causing the seizures) but it was not found on an MRI done 10/4/10 (her 10th bday) and we let her go the day before she was supposed have her second, knowing even if they found something she needed to be released from all that was going on with her.
This could just be the beginning of dementia and not a tumor, probably more likely - just mentioning that Rainey did the same thing. I know there are meds now to help with dementia, perhaps talk to your vet?
hugs. It's very hard to watch them like this