This dog sounds like a farm dog. Born and bred to work. Its what they live for. Not just what they do while they are alive, but what they LIVE for! And "being bred for pups"? Thats called a breeding program. Thats how breeders make new dogs when the old ones quit working. Maybe they are just pumping out puppies for $5 a pop... maybe youve got your hands on a bedraggled world class stock dog that drops a litter every year or so and people from around the country clammor for one of this dogs pups? Who knows?
You have no idea what happened to this dog to get it into the situation it is in now. Maybe some other "thoughtful" person "helped" this dog and it got loose? Maybe the fact that it was distressed was because it wasnt HOME? Maybe it had torn up pads from running on hot asphalt trying to get back to its people? Maybe the dog had been lost for days, or weeks?
I swear, if someone came across some of the dogs Ive worked with over the years - they would think they were flat beat animals. Missing teeth, scars, broken tails... but those dogs were doing what they LOVED LOVED LOVED to do! Throw too many tennis balls for a dog to catch in midair and the one time you throw a rock out of your garden - bam! broken tooth. Run a border terrier through an earthdog trial and as he shoots down the tunnel he gets a stick caught between him and the tunnel wall. Out he comes bleeding from a 2inch gash... but it was at an AKC sanctioned event and hell, the breed standard says that "honorable scars" are not to be held against the dog. Broken tails? easy... let two bulldogs play tug-of-war and watch what happens if one dog looses grip. Now imagine it that the dog that is the winner is holding his tail perpendicular to a brick wall. crunch!
At the end of the day, your probably not doing anyone a favor here, for all the misgivings you have, perfectly reasonable events may have occured to give you some false sense of the situation. Also, your stealing, and unless youve got some secret hiding spot for this dog, not only are you a thief, but they are just going to confiscate the dog and return it.
Do the right thing and return the dog.