I find it extremely distracting. When there is a dog around, you'll always find a bunch of people throwing the ball with it or something like that in the middle of the open space.
And there is of course the dog owner who just doesn't care where the dog is. Doesn't care that it's coming to my desk to lick my shoes, or bothering me while I'm trying to eat in the kitchen.
Purely based on empirical observations (so, it's worth what it's worth) I feel like dog owners automatically assume that everyone else loves dogs as much as they do. They care very little about people who are scared, allergic, disgusted, etc.