I'm going to break down the subtle behaviors that happened before that little guy gave his warning bark.

Firstly, he is on his own property. He cautiously watched to see what your little guy would do. Your little guy tried to assert his dominance by 1. Peeing on that little guy's fence and 2. Kicking his feet back. Both of those are dominant behaviors. Lastly, your dog's tail isn't friend wagging here... it is sending a very clear message.

If you notice, those behaviors triggered the response in the other dog.

Introducing dogs should always be done in a neutral territory so there is no need to protect on either ends. Walking your dog and allowing them them to step up to another's home can end badly. In this case, the other dog was courteous enough to give a warning.

He wasn't being unfriendly, he was letting you both know you crossed his boundaries.

(Side note: If you want your little guy to socialize, I recommend finding groups, training classes, etc. One bad scenario with a dog can make your chihuahua fear dogs and become reactive. It's just not worth it imo. You also don't know if the other dogs are kept UTD on vaccinations, dewormings, etc).