The reason you see on-leash dogs uncomfortable in an environment like that is because of a thing called barrier frustrations. The dogs feel restricted on the leash, so they feel unable to interact properly...and sometimes the owner can cause inappropriate interaction...if the owner sees their dog become uncomfortable and yanks them away...that sends all kinds of body language to other dogs.
Letting your dog meet through a fence can also cause this-so use it with caution. It may be fine with your dog, but the dogs your dog meets might not be able to handle it. It's kind of hard for your dog to put it's butt up to the fence for another dog to sniff it...and what ends up happening is face to face interaction-in the dog world that's rude behavior right of the bat.