I have rancher friends that have lost lots of their pet dogs to coyotes. The yap and bark trying to get the dog to come after them, then they pack up and kill it. Your old range dog must be pretty smart!
She's been doing this for a while and hates coyotes. She also trusts me to dispatch them before they can hurt her. You are right; coyotes will sit and bait the dogs to come out. Often they kill the males and mate with the females. About 30 minutes from downtown Reno there is a pack that is crossed with something very large resulting in 60-70 pound coyotes. Scary proposition. I have been working to get rid of them for about three years. Smart buggers stay just close enough to houses to make it hard to get them.