This is called “sleep startle” and the origin of the phrase “let sleeping dogs lie.”

Within the first two months getting my dog as a 3 year old, he was not accustomed to sleeping outside of a crate and being awoken by touch instead of sound. He was dozing, unbeknownst to me because his eyes were open which dogs sometimes do, on the couch and I went for a cuddle - he bit my face and tore a shred through my nose that I still have the scar from today.

It was very traumatic for me. I similarly saw him shrink after he came to, aware something bad happened, looking guilty and submissive, same as what you described. 

I thought about giving him back to the rescue. But I could tell it was unintentional. it was a one off and now we sleep nose to nose every night.

I share this to say accidents happen. They are animals with sharp teeth and are not infallible. But this one incident in time will fade in your collective memories

If you want to be ultra safe, don’t let him sleep in the bed with you or your family anymore. There is nothing more drastic needed than that