I've gone back and forth on whether they should try to fix him or give him to a better handler or put him down, based on the description and following discussion. I'd like to hope they'll go to a pro and have him/her see the dog, and their handling of him... a pro who can see all those factors you describe that we cannot. And then follow the advice given.
Dogs will often learn to do certain things to get a reaction or attention.
In the end, it is not desirable for the owned or the dog to have this kind of situation. The dog seems to be trying to get a fear reaction that he can sense quite well. If this is a learned behavior, it can be corrected with long term training.
A good trainer should be able to determine this within a week or so and come up with a program or recommendation. Your idea is a good one.
But it may well be throwing good money after bad, I can't be sure without meeting the dog. I love animals, and I care a great deal about the ones under my roof. But I would not want to own something I feared or did not trust.
I hope everything works out.