This video is self-explanatory. The little coyote was out, mostly hunting for food, when it stopped to observe a few sparse dog walkers in the distance. I only caught the last minute on video, but the coyote sat there for about 10 minutes total time. When it was through watching, it continued it’s trek in search of a gopher or a vole.
Coyotes enjoy observing dogs from the distance — they hope, while doing so, that they won’t become detected. If a dog detects them, it will often end up chasing the coyote. Most coyotes will flee if they are chased by a dog, but a dominant coyote may well chase back, and even nip. After all, this is their territory and they would do the same to any interloper coyotes. On occasion, especially during pupping season, a coyote might charge a dog it feels is threatening its space. For this reason, it is best to keep pets leashed in a coyote area — it’s the smart thing to do. Coyotes are much less likely to engage in this behavior towards dogs that are kept close to their owners.
Coyotes have no interest in human encounters — they just want to be left alone and will maintain their critical distances from all humans unless they are prompted/trained to do otherwise through human intervention. The worst intervention involves feeding, which, in fact, is illegal. Please, never feed a coyote: you are hurting the coyote’s health and it’s independence and wildness.