Once they have sniffed each other and you are satisfied with the behavior towards each other you can feel free to remove the leashes. I still wouldn’t leave them unattended; an older dog can intimidate a puppy very easily. Puppies on the other hand can totally annoy an older dog. It may take a while before they can be together unsupervised. Be patient, most of the time they will come to common ground.
I like to have the two dogs together while having quiet time. This lets them get comfortable with each other while trying to head off any jealousy. If they see that the love and affection is evenly disbursed they can relax about competing for all of your attention.
When raising a protection dog we try to get them exposed to as many other animals as possible. Including our cats and the horses down the road, we have even had the chance to get around some alpaca’s.
A good personal protection dog can work with the distraction of other animals.