What kind of aggressive is my dog?

My 7 month old pit/american bulldog pup is pretty aggressive. I can walk past dogs without anything happening, but in his class he hides wherever he can and he lays down whenever he's not under command and his ears are back so I thought it was fear aggression, but when anyone comes within 5 feet or so he tenses up and stares them down. Do fear aggressive dogs challenge other dogs? He is still sitting which is a vulnerable position and he stays against the wall. My trainer says its fear aggression but he snapped at her pretty bad the other day. She had a stare down to say "I'm the boss" and it took him about 30 seconds until he looked away and stopped growling, so she said "good boy" and when she turned around he went for her leg barking and growling. Then when we walk if someone comes too close he stares at them and then just sits down, even if they're just passing. He doesn't growl unless they approach and make eye contact. But he doesn't put his ears back to passing people and dogs. They're up usually. So I don't know what method to use, they say don't correct a fear aggressive dog, that'll make it worse, so what do I do? If I do correct him he looks scared of me, more scared then the dogs in our class when they are corrected. I've had him since 8 weeks so I don't think it happened before. Its like it happened overnight, because he was fine until about 14 weeks I took him places and he loved to be pet. Please don't comment on the breed, I've had pits my whole life and never experienced ANY aggression in any but this one. I know I can fix him, I just don't understand it fully. Can someone tell me and give some advice?