You have already done a lot to help comfort this man. Possibly you could try to help him get over his fear of dogs. Little puppies should be non-threatening, so introduce him to a puppy and slowly work your way up to more mature and larger dogs.
You can tell him to stop threatening you if he wants to continue talking with you. He sounds like a lonely old man that wants attention, and he will probably make small changes in his behaviour to keep your company and attention.
Remember, he is very old, and he may have a mild case of senilia dementia (thinking dogs are Satan may be a symptom of this). Plus, at that age it is harder to heal, and what may heal in days or weeks for younger people may take months for older people. His shoulder may still be bothering him. Possibly having a doctor prescribe a fentanyl patch for his shoulder will ease the pain and make him pleasanter company.
There may be no good resolution to your problem, or he may die tomorrow. It is a sad situation, and you share very little of the fault for his problem. It was his own fear that caused the accident (aided by your dog's aggressive behaviour). At some point you may feel that you have done enough for this man, and tell him to either sue you or get over it. I would seriously doubt that he could get any kind of judgement against you, especially after all you have done to try and mitigate his suffering.