If it bites someone it should be punished
You really don't understand dog psychology.
Anyway. As said above, you need to report it so that it's raised as an issue that needs to be dealt with.
I work with dogs, and have trained lots of dogs. I'm starting a training school next year also, and my recommendation to police would be one to one training sessions mandated to the owners for 6 months.
The biting is a reaction to something as a trigger, its pretty simple to replace the reaction the dog demonstrates, but unless the owners are made aware of how serious an issue it is the dog cannot be helped.
Essentially the dog would be frightened, which leads to fear, which leads to a desire to act first. He needs desensitising, which can be done with the vast majority of dogs, it just needs time and patience.
Reporting it to the police is the best thing for everyone, you, the family and the dog. You may stop it from hurting others, and you could stop it from the dog actually ending up being put down.